What Is ADD Insurance: A Comprehensive Guide About Accidental Death And Dismemberment Insurance

Life insurance is a term commonly known in the masses, but there are numerous things attached to it that remain in the dark, just like AD&D Insurance. So today, we’re going to shed some light on what AD&D insurance is.

Life is a years-long episode of uncertainties. You never know what is going to occur in the next second; maybe you will receive that email you have been waiting for weeks or months, or maybe you will get a call from someone you were desperate about, or perhaps, a text conveying news you never wanted to know. Or worst of all, maybe you fall prey to the inevitable reality of death.

Not a single minute is immune from a disaster storming your life. There are immense possibilities of unfortunate events appearing in your life out of the blue. But for now, let’s just consider the last scenario mentioned at the end of the previous paragraph.

Suppose you have kids who mean life to you and a wife that fills your life with colors, and you love them so dearly that you don’t want them to come face-to-face with any kind of trouble, in any case. However, if in some unfortunate incident, you lose your life or get severe injuries and maybe lose one or two limbs, or god forbid, lose eyesight, hearing, memory, or any similar ailment, it is your family who has to bear the brunt of it.

Their loss is immense; with one accident, they lose a caretaker, a husband, and a father, but above all, the sword of many troubles, primarily financial, starts dangling over their heads.

That is where AD&D insurance comes to the rescue. It is an insurance policy that focuses on providing help to the family in financial terms to lessen their agony. But is AD&D insurance worth it? We know there must be a commotion of questions in your mind, including this one. And rest assured, all will be answered here. So without further ado, let’s scroll down and get started.

What is AD&D Insurance?

Accidental Death and Dismemberment (AD&D) Insurance, as the name suggests, is insurance that provides coverage to the beneficiaries in case of an insured’s unintentional and accidental death or dismemberment, which may include the loss of body part(s) or functioning of senses, i.e., eyesight, hearing, etc. The beneficiaries named under the policy will get a lump sum coverage if the insured dies and the cause of death is confirmed as unintentional and accidental.

The ‘accidental’ nature of the death may vary from company to company offering AD&D. Nonetheless, there are some basic rules under which the merit of provision of coverage is determined. For example, if the insured dies or gets severely injured in an accident, the beneficiaries will qualify for the coverage. However, if, at any stage after death, it is found that the insured was drunk driving, there is a huge possibility that the company will not entertain any coverage.

It is important to note that accidental death and dismemberment insurance don’t pay if the cause of death is natural, namely heart failure, kidney failure, brain hemorrhage, cancer, etc.

Likewise, there are other conditions as well under which ‘accidental death’ is decided in order to disperse coverage to the family. We will discuss these coverage limitations in detail later in this article.

To sum AD&D insurance up in one line, it is a policy designed to minimize the financial impact on a family and protect against the possible financial fallout in case of death or dismemberment of a family’s breadwinner.

Pros and cons of accidental death and dismemberment (AD&D) insurance

There is an upside downside to everything, and AD&D is no exception. It is often much chided by people belonging to different sectors due to its limitations on coverage. But, at the same time, it’s also been praised mainly by financial experts and strongly recommended by them under certain conditions. Indeed, there are both pros and cons in pursuing the policy, but before we discuss them, there is something that requires some attention.

There is a misconception about AD&D being a type of insurance. This is factually incorrect. AD&D insurance is not a type of life insurance nor a substitute. It is merely a supplement to life insurance, a piece of the larger picture. Life insurance is a general term that includes health, education, business, load, and many other benefits. In contrast, AD&D insurance is limited in its scope and entails financial coverage only after accidental death or dismemberment.

That said, let’s first move on to the pros of AD&D insurance.

Quick lump-sum coverage in case of accidental death

As it doesn’t require filling out very long questionnaires and medical examinations to confirm the cause of death, the bereaved family instantly gets the coverage with a total amount without any unnecessary ado. The policy can be approved in a matter of days or hours once the accidental death is confirmed.

A helping hand in bleak times

When a death occurs, it’s never easy to stand firm and emotionally strong. The grieving family’s ordeal is tantamount to unbearable pain and an agonizing experience. And if woes like financial come to the surface in such a sad state, it only adds insult to the injury. No doubt, if a breadwinner dies, the family incurs a heavy price as gradually, the accounts go drained as a result of funeral and other many expenses.

AD&D proves to be a helping hand in this situation as by not allowing the bereaved family to wait for days to receive coverage, it lessens their pain and eases their suffering.

AD&D is inexpensive

Though the limited coverage offered by AD&D is often rebuked by specific elements, there is also a silver lining. Because of its narrow approach to providing coverage for death, the premiums are comparatively inexpensive. If you are an employee anywhere and your firm/company is offering AD&D insurance, you might have to pay only a few dollars per month. However, purchasing individually is also cost-friendly as compared to term insurance.

Accidents are rampant among adults in the US

According to the Centers for Disease Control, accidents are the No.1 cause of death for the age group between 25 to 44 in the US, and In general, it is the third leading cause of casualties in the country. Given these alarming stats, it only seems reasonable to get an insurance policy that provides coverage for accidental deaths.


Limited coverage

The limited coverage comes under the most criticized aspect of AD&D insurance. It’s quite disadvantageous for policyholders as it accentuates that in order to qualify for financial coverage, the insured’s death or dismemberment must be accidental, not natural or otherwise. What does it mean in simple words is that if the insured is a heart patient and dies in a stroke, no matter at home or while driving a car, he won’t be liable for the payment.

What’s more, if the insured dies in an accident caused by a heart stroke, AD&D rules suggest coverage won’t apply even after that. Dying from cancer shall also rule out any chance to be paid. This might seem a little unfair to many, as heart disease is the number one cause of death in the United States, followed by cancer which stands at number two. Accidents are rampant in adults between 25 and 44 years old, implying that AD&D won’t prove to be much beneficial for senior citizens.

Further, the AD&D insurance policy also excludes death in a war or terrorist attack from its scope. It believes such deaths aren’t accidental, making insureds ineligible to get the coverage. Other exclusions include:

  • Armed forces
  • Suicide
  • Death after a certain period of getting severely injured
  • Drug overdose
  • Death or injury while committing a crime
  • Death or injury while indulging in a high-risk hobby, i.e., sky-diving, scuba-diving, etc.

Inculcates a misplaced sense of security

AD&D policy is often part of the employer’s package to an employee, which he gets at the time of joining the company. Now, it is a fact that employees don’t always remain with the same company, and switching is part of professional progression. However, in terms of AD&D insurance offered by an employer, if the employee decides to switch the job at any phase, he explicitly withdraws from accidental death and dismemberment insurance and will have no right to claim it, no matter if he had worked 25 years or 50.

This almost renders AD&D not only irrelevant but also insecure and redundant as, first, the chance of dying from an accident for someone above 45 is one in twenty. Second, the probability of dying from a disease is higher than from an accident, so even if one subscribes to AD&D and regularly pays for it, the payment is going to be forfeited in case the insured suffers a natural death.

It is not as inexpensive as it seems

AD&D is also expensive in certain situations. Suppose an AD&D policyholder gets severely injured in an accident and is in critical condition. That is the time he direly needs financial coverage, but instead, rules suggest that until the insured doesn’t die within the prescribed period and extends the time limit, he won’t be able to get any kind of financial coverage even after he dies after that.

Moreover, if the insured loses a limb or two or suffers sudden vision and hearing loss, he will get only a fraction of the total payment.

All in all, AD&D has its positives and negatives like any other policy. Where its limited coverage is, for sure, a cause of concern and sounds totally unfair, its quick process of payment after an accidental death is definitely some relief for bereaved family members. In the end, it all depends upon your preference.

Accidental death and dismemberment insurance benefits

After discussing the pros and cons in detail, it is important to have some grasp of the benefits that come with AD&D. We discussed some in the previous section, but it is not possible to cover all the perks attached to AD&D in one section. So, below are a few additional benefits that various insurers offer. Please keep in mind that these additional benefits vary from insurer to insurer, so it is suggested that you inquire about any of them first before buying the policy.

  • There are some insurers who will pay additional benefits if the insured or injured who died in an accident was wearing a seatbelt.
  • Some additional benefits also include assisting in your children’s higher education pursuits, finance-wise.
  • Some insurers offer to provide counseling and legal and financial advising services to your family if you lose your life or get severely injured.

Do I need both life insurance and AD&D?

A very precise answer to this question would be NO – you don’t need to buy AD&D insurance if you already have whole life insurance. But, as they say, “the devil is in the details,” knowing the context is important before you make a choice.

Life insurance or term life insurance distinguishes AD&D in more than one aspect. Firstly, it is not limited in scope and offers coverage on different causes of death, natural or accidental. Especially if you are buying a term life insurance policy, you will be able to get the full payment after the prescribed policy term ends. And if you have a whole life insurance policy, you can make yourself comfortable because of the fact that you are mostly covered.

That’s not only applicable in terms of unexpected events but also includes health, education, travel, and many other benefits. However, the monthly cost of buying a life insurance policy might be higher than you expect.

On the contrary, Accidental Death and Dismemberment insurance doesn’t cover a whole lot of life insurance aspects and offer full benefits only after the accidental death and partial benefits in case of injuries. The full benefits AD&D offers in case of death are also compromised because of the limitations on its definition of ‘accidental death.’ You might die because of a heart attack, but beneficiaries won’t be considered for coverage as it’s a natural cause of death.

The coverage will only be offered if:

  • The insured dies in an accident
  • The insured dies falling off a cliff or from any upward area unintentionally
  • The insured drown in the water and dies

However, AD&D might be more beneficial than life insurance on two counts. One, unlike life insurance policies, AD&D covers severe injuries, namely loss of limb(s) or their function, loss of eyesight, hearing, or any injury of such kind. Besides that, Accidental Death and Dismemberment Insurance costs way less than life insurance. You may have to pay around $12 per month compared to more than $40 for a life insurance policy.

Nevertheless, let me repeat that AD&D is not a complete life insurance package but rather merely a part of it that aims at providing financial assistance in case of death or injuries. Though you don’t need to buy AD&D if you are already an owner of a life insurance policy, if you want to add an extra cover to secure your future against expected incidences and if you can afford it, maybe buying AD&D coupled with the whole life insurance won’t be a bad idea at all.

What is AD&D insurance vs life insurance

The difference between AD&D insurance and life insurance is that of coverage limitations only. Life insurance is broader in its scope, while on the other side, AD&D is limited and merely entertains specific details in order to pay.

We have discussed this earlier, but to better comprehend the complexities, it is important to understand the fundamentals of both AD&D and life insurance.

Life insurance

Life insurance is a comprehensive financial protection plan for your family that is inclusive when it comes to coverage in case of your death. It pays out all the agreed benefits to your family after you die, regardless of the cause of death.

There are many types of life insurance, but all others fall under the primary two explained below:

1.    Term life insurance

The policies offered under term life insurance last for a specific period of time. If policyholders don’t die during the specified time, they are automatically termed ineligible for a payout as the policy expires.

2.    Permanent life insurance

The permanent life insurance policies last till the death of the insured, and a total payout goes to the beneficiaries after the death of the policyholder, natural or otherwise. These policies also entail a cash value component that allows policyholders to withdraw or borrow while they are alive.

Accidental Death and Dismembered Insurance (AD&D)

Any policy offered under AD&D insurance provides cover only from accidental deaths and doesn’t entail any natural cause of death, including but not limited to old age, heart attack, cancer, and mental illness.

Another factor where AD&D distinguishes itself from life insurance is that it pays out a fractional amount of the policy if the insured gets severely injured and loses arm(s) or leg(s).

To dissect the difference and coverage range of life insurance vs. AD&D in simple terms, here’s the table comparison of both policies:

Cause of death/injury Does Life Insurance cover it? Does AD&D cover it?
Illness or disease Yes No
Accidents, i.e., car crash, falling, drowning, etc. Yes Yes
Drug overdose Yes No
Drunk driving Yes No
Suicide Yes No
Severe injury, i.e., loss of limb(s), eyesight, hearing, etc. No Yes
Murder Yes Yes

The facts mentioned above shed enough light on distinguishing the nature of AD&D and life insurance. As far as the matter of choice is concerned, it purely depends upon one’s preference.

Suppose you want your beneficiaries to get some or full coverage even in the case of severe injury. In that case, you are welcome to go with AD&D. If you believe the conditional coverage offered by AD&D in case of an accidental death caused by ‘selective’ circumstances would be helpful for your family after your death, AD&D might be a good bet. However, if you want a total payout regardless of the cause of your death, life insurance would be the best choice.

Is AD&D insurance worth it

The fact that Accidental Death and Dismemberment insurance doesn’t entertain most of the death causes, generally considered accidental, for policy coverage makes it less favorable for the selection of life insurance. It only considers death in road accidents, drowning in the water, or falling off the cliff as an eligible cause of death for payout, while the stats suggest that accidents are the 4th cause of death in the USA. Heart disease, cancer, and now COVID-19 sit at first, second, and third positions, respectively.

Considering that, AD&D might not be worth it. However, it is difficult to deny that it does provide cover for protection in case of a serious injury, which is not the case with life insurance. Moreover, it is a budget-friendly policy as it costs less than $13 a month. It is understandable if you find yourself ambivalent about choosing it or leaving it.

However, in such a situation, if you really can afford it, there is a possibility to add AD&D insurance to your already existing life insurance policy by integrating AD&D rider with your life insurance. Also known as double-indemnity, it can be a viable option for you as it could pay you in case of injury or death, irrespective of the cause.

What is covered by AD&D Insurance?

Accidental Death and Dismemberment insurance shall only cover the following:

  • Accidental deaths (i.e., car crash, hit by a car, slipping off cliff/rooftop, etc.)
  • Accidental injuries (i.e., loss of arms, legs, eyes, any part that renders you disabled)
  • Loss of function in an accident (i.e., eyesight, paralysis, listening, etc.)
  • Accidental death while traveling in public transport (i.e., taxi, airplane, bus, etc.)

What is not covered by AD&D Insurance?

Accidental Death and Dismemberment insurance exclude the following causes of death from its payout coverage:

  • Prior to coverage injury
  • Death caused by illness
  • Death caused by mental illness
  • Death caused by self-inflicted injuries or suicide
  • Death caused by drug overdose
  • Death caused by drug or substance abuse
  • Death caused by drunk driving
  • Death caused by taking poison
  • Death caused while committing a crime
  • Death caused while participating in a riot
  • Death caused during a war
  • Death caused during a terrorist attack
  • Death caused by high-risk hobbies, i.e., scuba diving, flying a plane, skydiving, etc.

How can you get AD&D insurance?

According to the Society for Human Resource Management’s survey of employers back in 2019, 83% said they were providing AD&D in the employment package. So, it is most likely that you will be landed AD&D insurance at your workplace. And maybe not only for yourself, but some employers also offer their employees to insure their children and spouse.

However, if you want to buy an AD&D insurance policy individually, there are a few companies that sell them. The companies include AIG Direct, Farmers Insurance, and Mutual of Omaha. Fabric also sells individual AD&D insurance policies, but two things are important to note: first, they only offer online policy service, and second, their policy doesn’t entail dismemberment.

How much does AD&D cost?

Accidental Death and Dismemberment insurance policies cost significantly lower than traditional life insurance policies, mainly because their coverage is limited to causes of accidents. You might even get a free bonus for a basic amount from your employer.

Generally, the cost of the AD&D insurance policy you are buying depends upon the type of package. For instance, a monthly package price starts at $4.50 for every $100,000 in accidental death coverage from Farmers. Likewise, Fabric offers $6 and $30 monthly for the same package for $100,000 and $500,000, respectively. However, rates do vary from insurer to insurer.

Final words

It is an established fact that due to limited coverage, AD&D lags far behind when it comes to fitting the needs of someone who wants to get a comprehensive insurance package. You may not like it. However, it is also true that AD&D fills the coverage gap for severe injuries, including loss of a limb, left behind by life and health insurances. Therefore, AD&D individually may not be an ideal insurance plan for you; complementing it with existing health and insurance policy will do more good than your expectations.

John Otero

John Otero

John Otero is an industry practitioner with more than 15 years of experience in the insurance industry. He has held various senior management roles both in the insurance companies and insurance brokers during this span of time. He began his insurance career in 2004 as an office assistant at an agency in her hometown of Duluth, MN. He got licensed as a producer while working at that agency and progressed to serve as an office manager. Working in the agency is how he fell in love with the industry. He saw firsthand the good that insurance consumers experienced by having the proper protection. John has diverse experience in corporate & consumer insurance services, across a range of vocations. His specialties include Major Corporate risk management and insurance programs, and Financial Lines He has been instrumental in making his firm as one of the leading organizations in the country in generating sustainable rapid growth of the company while maintaining service excellence to clients.