Accidental Death and Dismemberment (AD&D) Insurance

Accidental death and dismemberment insurance, or AD&D, provides money to your beneficiary if you die due to an accident. It may also pay out if you lose a limb or a bodily function, such as your vision, due to an accident. AD&D insurance is usually low cost and has several restrictions.

What Is AD&D?

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 beneficiaries 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.

AD&D should not replace standard disability or life insurance coverage.

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.

How Does AD&D Insurance Work?

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

Restrictions apply. For example, 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.

The death must also be a direct result of an accident. No other condition can have contributed.

For example, if you suffer a heart attack while swimming, which 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

It is uncommon for a policy to pay 100 percent for an injury or dismemberment.

One exception is losing both a limb and a major bodily function, such as a finger and vision in one of your eyes.

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

Where Do You Get AD&D Insurance?

Many employers offer AD&D insurance as part of a benefits package.

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

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

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.

Do I Need 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 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.

Most experts recommend getting AD&D insurance if it’s offered for free through your employer.

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 at a low rate through your employer.

Last Modified: January 7, 2021

4 Cited Research Articles

  1. SBWIRE. (2020, December 3). Accidental Death and Dismemberment Insurance Market to Witness Excellent Growth: AXA, MetLife, Allianz. Retrieved from http://www.digitaljournal.com/pr/4902853#ixzz6frNfrJlT
  2. 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/
  3. 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
  4. 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