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Accidental death and dismemberment

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Accidental death and dismemberment insurance, also known as AD&D, helps to financially protect you and your family if you are disabled or killed in an accident. Unlike most traditional life insurance policies, accidental death and dismemberment insurance can payout to the insured while they still live. 

AD&D insurance is highly nuanced in how it works, making it important to know “what does accidental death and dismemberment cover,” to what separates accidental death and dismemberment insurance from term life insurance. In this article, we’ll delve into these questions and work through the answers so that by the end, you’ll know whether or not accidental death and dismemberment insurance is worth it for you.

What is accidental death and dismemberment insurance?

Accidental death and dismemberment insurance is an insurance policy that pays out to the policyholder’s beneficiaries in the case of death or dismemberment due to a qualifying accident. AD&D has elements that can payout while the insured is still living, which is counter to more common forms of life insurance. As a further distinguisher, accidental death and dismemberment insurance is offered as a supplemental policy or rider.

Accidental death

These policies often specify conditions such that a covered death must be from an unforeseen and extreme situation. Illnesses rarely qualify as they are foreseeable. However, deaths due to exposure, vehicle or heavy machinery accidents, homicide, drowning and other lethal accidents are usually covered.


Injury due to a covered accident, if severe enough, can result in a partial payout while the policyholder still lives. These are permanent injuries such as a lost appendage, limb, eye or other body parts. The exact details are specific to the policy and insurance company. Still, most of these types of injuries will pay out a percentage of the total possible payout on the policy.

Voluntary accidental death and dismemberment

Voluntary accidental death and dismemberment (VAD&D) is generally offered as an employee benefit option. While it functions similarly to AD&D, it tends to have greater limitations and lower premiums. VAD&D insurance tends to have the same stipulations as AD&D but is offered specifically to members of a group. Two of the most common examples are employees and account holders at a bank.

What does accidental death and dismemberment insurance cover?

Accidental death and dismemberment insurance covers death or the loss of body parts (including loss of use) due to an unforeseen accident. However, individual policies vary as to the details of what accidents qualify and how much they’ll pay out for different types of dismemberment.

For example, if Brad has an AD&D policy and he has his foot irreparably crushed during a climbing accident, his accidental death and dismemberment coverage will make a payout over the loss of function of that foot.

Another example is if Anne is wearing glasses when she trips and falls, leading to broken glass lacerating her right eye. If the eye is damaged beyond recovery, her AD&D policy will make a payout for the loss (or loss of use) of that eye.

In both examples, the payout size will depend on the policy details. However, it would be doubtful that either instance would see a full policy payout of 100%. Instead, different losses are covered by specific percentages of the total possible payout (the payout that would occur for a death).

What does accidental death and dismemberment not cover?

  • Non-accidental death or dismemberment: As a blanket rule, AD&D only covers deaths and injuries that are sustained as a result of an accident.
  • Illness: Illnesses are rarely covered as they can be diagnosed and potentially treated before the point where they would cause death or dismemberment.
  • Certain dangerous activities and sports: Base jumping, skydiving and other highly dangerous activities are rarely covered. Some activities have a high enough danger factor that they are seen as inviting the risk of death or dismemberment.
  • Suicide, or other intentional death and dismemberment: Intentional self-harm of any kind is seen as non-accidental and so is not covered under AD&D policies.
  • Medical procedures gone wrong:  AD&D does not cover you if a surgeon makes a mistake while operating on you. In this situation, it is the surgeon’s or hospital’s liability insurance that would cover the case.
  • Drug overdoses: AD&D policies do not cover drug overdoses. This does not mean that drug overdoses are intentional, but rather that taking drugs is seen as a risky and chosen behavior.  

Pros and cons of accidental death and dismemberment insurance

Accidental death & dismemberment insurance can be incredibly useful in the right situations, but these situations are rare for most people. If you’re trying to decide if AD&D insurance is right for you, then take a look at our table of pros and cons. If the pros outweigh the cons for your situation, then AD&D might be a good fit.

Fast coverageLimited coverage
No medical examPayouts are heavily restricted
Minimal acceptance requirementsPolicies are often tied to employment

Accidental death and dismemberment vs term life insurance

One of the most significant differences between accidental death and dismemberment insurance and term life insurance is that the second one will pay out death benefits whether the death is an accident or natural. Take a fatal heart attack as an example. AD&D would not payout on a death caused by a heart attack, but term life insurance would.

When looked at side by side, you can see that these policy types are designed for different purposes. Term life insurance is a standard life insurance policy that pays out when the insured dies. AD&D is specifically designed to cover losses of life or body due to accidents and nothing else. This line reveals how the two policy types complement each other and highlight why AD&D is offered as a policy rider on top of more traditional life insurance policies.

People who are most likely to benefit from AD&D insurance are those who deal with high-risk situations and have a higher than average chance of suffering loss of life or body function due to an accident. This may be anything from working with heavy machinery to being a chemistry teacher. In contrast, term life insurance can be useful for anyone who doesn’t already have sufficient life insurance coverage.

Term life insuranceAD&D insurance
Payout for any deathPayout for accidental death only
No payout for dismembermentPayout for dismemberment
Standalone policySupplemental or policy rider
Designed for everyoneDesigned for special circumstances

Is accidental death and dismemberment insurance worth it?

This type of insurance can be incredibly beneficial to the right people. If you work in a profession with a high risk of debilitating injuries, then this insurance is perfect for you. Machinists and operators of other heavy equipment are considered the ideal fit for AD&D coverage. While this is true, anyone who has an above-average risk of death or dismemberment due to accidents can benefit from AD&D.

The reason high-risk situations call for AD&D insurance is twofold. First, basic liability coverage may not be enough to pay for the medical costs associated with the accident. Secondly, these types of accidents can easily lead to a sustained loss of income. It is this second scenario that inspires many who apply for accidental death and dismemberment insurance. Loss of a limb or other vital body part can make earning a living wage complicated, especially if the injury precludes you from continuing to work in your traditional field of employment.

Most people will not see much benefit from accidental death and dismemberment insurance. If your profession, hobbies and lifestyle don’t present a higher than average risk of accidental death or dismemberment, then an AD&D policy isn’t likely to be worth the investment. Accidental death and dismemberment payouts are rare, and people who aren’t in a high-risk position are unlikely ever to see a payout. Instead, making sure you have decent health insurance and a reasonable term life insurance policy should offer enough coverage.

The takeaway

AD&D insurance is the perfect policy for high-risk situations

  • Accidental death and dismemberment insurance pays out when the insured individual dies or becomes permanently injured from an accident.
  • This type of insurance is generally offered as a supplemental or policy rider on another life insurance policy.
  • Most people will not benefit much from this type of insurance but instead would do better with a traditional life insurance policy.
  • AD&D insurance is excellent for people with higher than average risk of lethal or debilitating accidents.

If you aren’t at a higher than average risk for accidental death or dismemberment, the odds of seeing a payout from AD&D insurance are low. For those who are, AD&D may be a smart investment. 

AD&D policy payouts are as rare as the accidents they cover, which helps to keep the premiums low on this type of insurance. For the right people, these types of policies can be essential. But for the rest of us, traditional life insurance offers sufficient coverage.

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