Accidental Death and Dismemberment (AD&D) Insurance

Accidental death and dismemberment insurance, or AD&D, pays out if you die accidentally or lose a limb due to an accident. AD&D should be viewed as a supplement to your regular life insurance since it only covers certain types of death and accidents.

Terry Turner, writer and researcher for RetireGuide
  • Written by
    Terry Turner

    Terry Turner

    Senior Financial Writer and Financial Wellness Facilitator

    Terry Turner has more than 30 years of journalism experience, including covering benefits, spending and congressional action on federal programs such as Social Security and Medicare. He is a Certified Financial Wellness Facilitator through the National Wellness Institute and the Foundation for Financial Wellness and a member of the Association for Financial Counseling & Planning Education (AFCPE®).

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    Lee Williams
    Lee Williams, senior editor for RetireGuide.com

    Lee Williams

    Senior Financial Editor

    Lee Williams is a professional writer, editor and content strategist with 10 years of professional experience working for global and nationally recognized brands. He has contributed to Forbes, The Huffington Post, SUCCESS Magazine, AskMen.com, Electric Literature and The Wall Street Journal. His career also includes ghostwriting for Fortune 500 CEOs and published authors.

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    Eric Estevez
    Eric Estevez, Independent Licensed Life Insurance Agent

    Eric Estevez

    Licensed Independent Insurance Broker

    Eric Estevez is a duly licensed independent insurance broker and a former financial institution auditor with more than a decade of professional experience. He has specialized in federal, state and local compliance for both large and small businesses.

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  • Published: January 4, 2021
  • Updated: July 22, 2022
  • 10 min read time
  • This page features 11 Cited Research Articles
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APA Turner, T. (2022, July 22). Accidental Death and Dismemberment (AD&D) Insurance. RetireGuide.com. Retrieved September 25, 2022, from https://www.retireguide.com/life-insurance/riders/accidental-death-insurance/

MLA Turner, Terry. "Accidental Death and Dismemberment (AD&D) Insurance." RetireGuide.com, 22 Jul 2022, https://www.retireguide.com/life-insurance/riders/accidental-death-insurance/.

Chicago Turner, Terry. "Accidental Death and Dismemberment (AD&D) Insurance." RetireGuide.com. Last modified July 22, 2022. https://www.retireguide.com/life-insurance/riders/accidental-death-insurance/.

What Is AD&D Insurance?

Accidental death and dismemberment insurance, or AD&D for short, is a limited form of insurance that pays out if you die or get seriously injured in an accident.

The beneficiary(ies) you name on your policy will receive a lump-sum payout if you die from an accident.

You may receive living benefits if you are injured in an accident, but the amount you get usually depends on the type and severity of the injury.

Accidental death insurance is inexpensive because it is considered low risk to insurers. In other words, it rarely pays out.

How Does AD&D Insurance Work?

AD&D insurance supplements other insurance — such as regular life insurance or disability insurance — in the event you are accidentally killed, dismembered or seriously injured. It is important to understand exactly what an AD&D policy covers — and does not cover — when considering all your insurance options.

What Does AD&D Insurance Cover?

Accidental death and dismemberment insurance will pay 100% of the policy value if you are killed in an accident.

AD&D insurance will payout:
  1. Full benefits if you die in an accident
  2. Some benefits if you are seriously injured in an accident

Cases of accidental death can include exposure to the elements, traffic accidents, homicide, falls, drowning, plane crashes or accidents involving heavy equipment.

Dismemberment is the loss of a body part or bodily function due to an accident. The types of injuries covered can vary by policy and insurance company.

AD&D insurance usually pays out benefits for certain injuries resulting from an accident, such as:
  • Loss of a limb or finger
  • Loss of sight, speech or hearing
  • Paralysis
  • Coma

AD&D insurance often comes with many restrictions. It does not cover death due to natural causes or illnesses.

What Does AD&D Insurance Not Cover?

AD&D insurance doesn’t cover all cases of death or dismemberment. It only pays out in specific situations and under specific conditions.

For example, if you suffer a heart attack while swimming that causes you to drown, the policy may not pay out.

AD&D policies often have a long list of circumstances under which a death or injury isn’t covered.

AD&D policies often exclude certain accidental deaths and injuries from coverage, including:
  • Drinking and driving
  • Risky activities, such as skydiving, bungee jumping or car racing
  • War
  • Surgery
  • Suicide or attempted suicide
  • Death or injury while committing a crime
  • Drug overdose

The death benefit is paid only if you die within a certain period of time after the accident. This can range from a few months to a year.

How Does AD&D Pay Out?

AD&D insurance payouts vary depending on the insurance company issuing the policy. Typically, an AD&D policy will pay 100% of its value if you die due to a covered accident.

But the payout for dismemberment typically depends on the extent of the injuries and the terms of the insurance contract. For instance, if you lose a hand, foot or one of your eyes, the policy may only pay out 50% of the value of the policy.

So it’s uncommon for a policy to pay 100% for an injury or dismemberment. One exception may be losing both a limb and a major bodily function or feature, such as a finger and vision in one of your eyes.

Exactly how much an AD&D policy will pay out for a particular loss is detailed in the policy’s schedule. The schedule lists the losses it covers and how much it will pay for each loss up to the value of the policy.

You should review the schedule of any AD&D insurance policy you are considering purchasing to understand exactly what is covered.

Where Do You Get AD&D Insurance?

Many employers offer AD&D insurance as part of a benefits package. Your employer’s policy may even allow you to include coverage for your spouse and children.

Did You Know?
According to the Society for Human Resource Management’s 2018 survey of U.S. employers, 83% of workplaces offer AD&D insurance.

If your job offers AD&D insurance, you might be able to get a basic policy for free as part of your benefits package.

Some life insurance companies also sell individual AD&D policies. You can work with an insurance agent to compare policies.

Accidental death and dismemberment coverage may also be sold as a rider, or add-on, to a life insurance policy. Adding this rider could double what your life insurance pays out if you die from an accident.

What Companies Sell AD&D Policies?

There are several insurance companies that sell AD&D insurance. Some specialize in selling group plans to employers, while others make coverage available to individuals.

Examples of Companies Selling AD&D Insurance Policies
Insurance CompanyWhere Available
AIG DirectIndividual through an insurance agent or broker
AssurityIndividual through an insurance agent or broker
Farmers InsuranceIndividual through an insurance agent or broker
FidelityIndividual through an insurance agent or broker
GerberIndividual through an insurance agent or broker
Lloyd's of LondonIndividual through an insurance agent or broker
MetLifeThrough employers
Mutual of OmahaIndividual through an insurance agent or broker
PrudentialThrough employers
Sun LifeThrough employers
The HartfordThrough employers
TruStageThrough certain credit unions

Employer-Based vs. Your Own Plan

It may be worth comparing an employer-based AD&D policy with one you purchase on your own to see which is a better bargain.

There are a few things you should know about each — particularly the advantages and disadvantages of each option.

Comparison of Employer vs. Private AD&D Plans
Employer PlansPrivate Insurance
Premiums may be lower than a private policyCost may be higher than through a workplace policy
Premiums typically are deducted automatically, providing added convenience and less chance of missing a paymentMissing premium payments can cause your coverage to lapse
Not portable — you typically lose coverage when you leave your jobYou can keep your coverage as long as you keep making premium payments on time
Limited options may not fit your particular needsMay be able to get higher limits on coverage and wider range of coverage options
Less scrutiny on your age and health since risk is spread across the total pool of workers at your jobYour age and health may play a greater factor in increasing the price of your premiums
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Differences Between AD&D and Life Insurance

There are several differences between accidental death and dismemberment insurance and life insurance. AD&D insurance should be viewed as a supplement to your regular life insurance coverage.

The biggest differences are the purpose of each type of insurance and the circumstances under which each will pay out.

Life Insurance vs. AD&D Insurance
Life Insurance
Life insurance is designed to provide financial protection to your family in the event of your death. It will pay out for almost any cause of death, whether accidental or not, with only a few exceptions.
Accidental Death and Dismemberment Insurance
AD&D insurance only pays out in the event of an accident that meets the policy’s schedule/coverage. You may also need life insurance to cover your family’s needs in the event your death is not covered — for instance, if you die of an illness or other cause your AD&D policy does not cover.

Life insurance typically covers more causes of death than AD&D. In addition, you can add AD&D coverage to your insurance portfolio — either as an AD&D rider to your life insurance policy or as a stand-alone AD&D policy.

AD&D Insurance vs. Life Insurance: What’s Covered?
Cause of Death or Injury
AD&D Insurance
Life Insurance
Accident (car crash, plane crash, hunting accident)
Yes
Yes
Drug overdose
No
Yes
Injuries or paralysis due to an accident
Yes
No (Unless you have an AD&D rider on your life insurance)
Loss of a limb, an eye, ability to hear or speak
Yes
No (Unless you have an AD&D rider on your life insurance)
Murder
Yes
Yes
Natural causes or illness
No
Yes
Suicide
No
No (If after the first two to three years the policy is in effect)

Pros and Cons of AD&D Insurance

AD&D insurance can offer coverage for your loved ones if you die or suffer a serious injury related to an accident.

But because AD&D provides limited coverage, it isn’t right for everyone.

Benefits of Accidental Death and Dismemberment Insurance
No Medical Exam or Questions
No medical exam is required to obtain AD&D insurance. You likely won’t need to answer questions about your health either. This can be appealing to people with pre-existing conditions who may find it difficult to get affordable life insurance elsewhere.
Get Coverage Quickly
With no medical exams, questionnaires or waiting periods, it’s usually quick and easy to get approved for a policy. You may be able to obtain a policy in a few days, or even in a few minutes for some policies purchased online.
Low Cost
AD&D insurance is usually cheaper than standard life insurance. For example, monthly premiums for an AD&D policy from Farmers Insurance might cost $4.50 for every $100,000 in accidental death coverage. Or your employer may offer AD&D coverage at no cost to you.

While accidental death and dismemberment insurance may seem like a good idea, it shouldn’t replace standard life insurance coverage.

Disadvantages of Accidental Death and Dismemberment Insurance
Coverage Applies to Accidents Only
AD&D insurance provides a payout only if you are killed or seriously injured in an accident. Other causes of death, such as chronic illness or cancer, are not covered. If your cause of death is not determined to be an accident, your beneficiaries won’t receive any money.
There Are Several Other Exclusions and Limitations
Policies often have a long list of coverage exclusions, such as surgery or skydiving. Also, the death benefit is paid only if you pass away within a specified period of time after the accident.
If You Switch Jobs, Your Coverage Will Likely End
Most people with AD&D insurance get it through a group plan at work. You usually can’t keep the policy if you take a new job somewhere else.

Is Getting AD&D Insurance a Good Idea?

AD&D should be considered a supplement to regular life insurance coverage and to disability insurance because it only pays out in limited situations with specific conditions.

Most experts recommend getting AD&D insurance if it’s offered for free through your employer. It’s typically free — or very inexpensive — making it a worthwhile investment in your family’s financial security.

But if you must pay for it, other options will afford you better protection and coverage.

For example, term life insurance won’t cost much more than AD&D insurance for people who are young and healthy.

Another option is disability insurance. You may be able to obtain disability insurance that provides all the coverage an AD&D policy does at a lower rate through your employer.

Last Modified: July 22, 2022
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11 Cited Research Articles

  1. Huddleston, C. (2022, May 19). What To Know About AD&D Insurance. Retrieved from https://www.forbes.com/advisor/life-insurance/accidental-death-and-dismemberment-insurance/
  2. Bowman, C. (2022, March 28). What Is Supplemental Life Insurance? Retrieved from https://www.usnews.com/insurance/life-insurance/supplemental-life-insurance
  3. IBISWorld. (2022, January 31). AD&D Insurance Industry in the US - Market Research Report. Retrieved from https://www.ibisworld.com/united-states/market-research-reports/add-insurance-industry/
  4. IBISWorld. (2022, January 31). AD&D Insurance in the US - Market Size 2005–2027. Retrieved from https://www.ibisworld.com/industry-statistics/market-size/add-insurance-united-states/
  5. Shoenthal, R., & Shih, A. (2022, January 11). Life insurance vs. accidental death & dismemberment (AD&D) insurance. Retrieved from https://www.policygenius.com/life-insurance/life-insurance-vs-accidental-death-and-dismemberment/
  6. CUNA Mutual Group. (n.d.). Show Younger Members Why Accidental Death & Dismemberment (AD&D) Coverage Matters. Retrieved from https://www.cunamutual.com/resource-library/insights/consumers/show-younger-members
  7. National Safety Council. (n.d.). National Safety Council Injury Facts. Retrieved from https://injuryfacts.nsc.org/
  8. SBWIRE. (2020, December 3). Accidental Death and Dismemberment Insurance Market to Witness Excellent Growth: AXA, MetLife, Allianz. Retrieved from http://www.sbwire.com/press-releases/accidental-death-and-dismemberment-insurance-market-to-witness-excellent-growth-axa-metlife-allianz-1318962.htm
  9. Huddleston, C. (2020, May 19). What To Know About AD&D Insurance. Retrieved from https://www.forbes.com/advisor/life-insurance/accidental-death-and-dismemberment-insurance/
  10. Society for Human Resource Management. (2018). 2018 Employee Benefits: The Evolution of Benefits. Retrieved from https://www.shrm.org/hr-today/trends-and-forecasting/research-and-surveys/Documents/2018%20Employee%20Benefits%20Report.pdf
  11. Regents of the University of California. (n.d.). Accidental Death & Dismemberment (AD&D). Retrieved from https://ucnet.universityofcalifornia.edu/compensation-and-benefits/disability-life-accident/add/index.html