What to know about accidental death and dismemberment (AD&D) insurance
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Updated 5:55 p.m. UTC May 2, 2024
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Life insurance can play an important part in maintaining financial stability for loved ones after your death, but what about accidental death and dismemberment (AD&D) insurance?
We’ll help you understand AD&D insurance, including how it differs from traditional life insurance and when it may be right for you.
What is accident death and dismemberment insurance?
AD&D insurance is a type of coverage that pays out a lump sum benefit if you:
- Die.
- Lose a limb.
- Lose a critical function, such as eyesight (this varies by policy).
With an AD&D insurance policy, your insurance beneficiaries will receive a death benefit if you die and your death was caused by a covered accident. If you are severely injured in an accident and the resulting injury is covered by your AD&D insurance policy, you will receive an insurance payout based on your policy and the nature and severity of your injury.
If an injury caused you to go blind in one eye, for instance, you may only receive a portion of your AD&D insurance benefit, such as 50%. But if the accident caused you to go blind in both eyes, you may receive the full benefit.
AD&D insurance is commonly available in the workplace, as many employers offer it as part of a benefits package. You can also purchase AD&D insurance as a standalone insurance product or by adding it to a life insurance policy as a rider.
When shopping for AD&D insurance, always review the policy’s schedule, which will indicate the payout amount for different injuries.
What does AD&D insurance cover?
Accidental death and dismemberment insurance policies vary, but they typically will provide a benefit if you die or sustain critical injuries from:
- Accidental drowning.
- Accidental death or injury by firearm.
- Accidental fall.
- Accident that takes place on public or commercial transportation.
- Car accident.
- Fire.
- Workplace accident.
What does AD&D insurance not cover?
Accidental death and dismemberment insurance will typically not provide coverage for death or injuries sustained as a result of the following, though exceptions vary by insurer:
- Natural causes, such as disease or illness.
- Suicide.
- Criminal activity, such as a DUI.
- Voluntary use of drugs, unless prescribed by a doctor.
- Voluntary ingestion of a gas, poison or fumes.
- Civil unrest or war.
- Bacterial infections.
- High-risk activities excluded by the policy, such as skydiving.
Ethos
Pros & cons of AD&D Insurance
If your company is offering an AD&D insurance policy at no cost to you, there is little reason to turn it down, but if you’re shopping for a policy on your own, here are some benefits and drawbacks to keep in mind.
Pros of AD&D insurance
- Financial security. An accidental death and dismemberment policy can provide financial security for your family if you die as a result of a covered accident. It can also help you manage medical expenses, replacement services and other financial obligations if you lose a limb or sustain a critical injury covered by your policy.
- Alternative to life insurance. Unlike some types of life insurance, there is no medical exam required for AD&D insurance. “Individuals in certain industries or who have health issues may not be eligible to enroll in traditional life insurance and this would be a way for them to get coverage at least due to accidental injuries,” said Heather Garbers, senior vice president of voluntary benefits at HUB International.
- Can’t be denied coverage. As long as you meet the age requirements of the policy, you can’t be denied coverage, even if you have a pre-existing medical condition. Age limits vary, but generally you must be at least 18.
- Cost. “[AD&D is] often viewed as a lower-cost alternative to life insurance and can be included as an add-on to life insurance for additional protection,” said Heather Deichler, a senior vice president at Lincoln Financial Group. So if you find that your life insurance coverage is lacking, it could be an inexpensive way to bulk it up.
Still, never assume that AD&D coverage is cheaper. If you’re torn between life insurance and AD&D insurance, shop around and get AD&D quotes before you buy. It’s also beneficial to get quotes for life insurance with an AD&D insurance rider.
AD&D insurance isn’t the only type of coverage that doesn’t require a medical exam. Learn more about no-exam life insurance to find out if it’s right for you.
Cons of AD&D insurance
- Limited coverage. Since AD&D insurance only covers accidental deaths, your loved ones won’t receive a death benefit if you pass away from other causes, such as a disease or illness.
- Exclusions apply. Even if you deem a death or injury to be accidental, insurers usually have a list of exclusions. For instance, if you are killed or injured in combat, or if you sustain injuries from a DUI accident you cause, it’s unlikely you or your loved ones will receive the benefit.
- Benefits may decrease over time. Some insurers will decrease the total death benefit as you get older. For instance, Guardian reduces AD&D insurance benefits by 35% at age 65 and continues to make incremental reductions until age 80.
AD&D insurance additional benefits
Depending on the accidental death and dismemberment insurance policy you choose, you or your loved ones may be eligible for additional benefits, such as:
- Coverage for your spouse and/or children.
- Bereavement or financial counseling.
- Additional death benefit if the insured dies in a car accident but they were properly wearing a working seatbelt and the vehicle had working airbags.
- Childcare.
- Spousal and child education.
- Adaptive home or vehicle services.
- Repatriation.
- Rehabilitation.
How to get AD&D insurance
There are several ways to get AD&D insurance:
- Through an employer.
- Directly with an insurance company or agent.
- By adding a rider to your life insurance policy.
One of the most common ways to get AD&D insurance coverage is through an employer. According to the most recent data from the Society for Human Resource Management (SHRM), 79% of organizations offer AD&D insurance in 2023.
If your employer doesn’t offer AD&D insurance, or you’d prefer to purchase a plan outside of the workplace, you can often do so directly with an insurance company or agent. Many life insurance companies also offer AD&D insurance as a rider, or a policy add-on, that you usually must pay for.
If you’re considering AD&D insurance and want to add it to a life insurance policy, keep in mind that this typically must be done when you purchase the policy. If you already have a life insurance policy, contact your life insurance company to discuss your options.
Several top-rated life insurance companies offer AD&D insurance riders, including:
- Protective.
- Corebridge Financial.
- Penn Mutual.
- MassMutual.
- Transamerica.
- Symetra.
Who needs AD&D insurance?
If AD&D insurance is offered as part of your employee benefits package — at no cost to you — there’s no reason to turn down coverage.
Unintentional accidents are the fourth leading cause of death in the United States, according to recent CDC data — accounting for nearly 250,000 deaths per year. So a policy, especially one that’s paid for by your employer, provides an additional layer of financial protection with no downside.
If you’re not eligible for a standard life insurance policy, you might also consider an AD&D insurance policy. Keep in mind, however, that guaranteed life insurance policies are another option. These life insurance policies generally do not decline coverage, but they are more expensive than other types of life insurance.
The best way to understand if AD&D insurance is a good option for you is to speak to a qualified professional, such as a certified financial planner or a licensed insurance professional.
How much does AD&D insurance cost?
AD&D insurance through an employer is often provided for free or at a significantly reduced rate. That makes it an inexpensive enhancement to your financial security goals.
If you’re purchasing a standalone AD&D insurance policy, rates will vary but often fall between $4 and $7 for every $100,000 of coverage. For instance, Farmers offers AD&D insurance with rates starting at $4.50 for every $100,000 in coverage you purchase.
Alternatives to AD&D insurance
AD&D can provide living benefits if you are critically injured in an accident, but if you die, coverage is limited to accidental deaths. Your family will only receive a death benefit if you die under specific circumstances. If you’re looking for more comprehensive coverage for your loved ones, consider life insurance.
“Life insurance is an alternative and it will pay whether your death is a result of a sickness or injury. There are many forms of life insurance including group options through your workplace, whole life, term life, universal life, which may be a fit based on your needs and goals.”
Heather Garbers, SVP of Voluntary Benefits, HUB International
There are multiple types of life insurance available, including:
- Term life insurance, which locks in rates and coverage for a set period of time.
- Permanent life insurance, which offers lifelong coverage, often with a cash value component, including:
- Whole life insurance.
- Universal life insurance.
- Guaranteed universal life insurance.
- Indexed universal life insurance.
- Variable universal life insurance.
- Burial life insurance.
Explore life insurance:
- Understanding different types of life insurance
- Permanent life insurance explained
- Compare life insurance quotes and policies
Life insurance policies also commonly allow for riders, or add-on coverages. Many life insurance companies offer accidental death and dismember riders, which can enhance your life insurance policy with AD&D benefits without purchasing a standalone AD&D policy.
Accidental death and dismemberment (AD&D) insurance FAQs
Not necessarily. If your primary goal is to provide your loved ones with a death benefit after you die, you may not need AD&D insurance.
However, there are some circumstances where an AD&D insurance policy may make sense:
- It’s offered free or for a minimal cost through your employer.
- You engage in high-risk workplace activities or hobbies.
- You want access to living benefits in the event of an accident-related dismemberment or other critical injury covered by an AD&D insurance policy.
Keep in mind that AD&D is often available as a life insurance policy rider. So if you plan to purchase life insurance, you may be able to secure AD&D insurance without needing to buy a standalone policy.
AD&D insurance may be worth it if you’re at a higher risk for critical injury or death due to an accident because of your profession or activities.
But always look for exclusions in an AD&D policy. Some AD&D insurance policies may not cover accidents caused by certain high-risk activities, such as skydiving.
If you want coverage that extends past accidental deaths, it may make sense to purchase a life insurance policy and add an AD&D insurance rider.
Yes. AD&D insurance provides a lump sum payment to you or your insurance beneficiaries, depending on the nature of the claim.
If you’re killed by a covered accident, AD&D functions similar to how life insurance works — your beneficiaries will receive a lump sum death benefit.
If you are dismembered or have another injury that is covered by your AD&D policy, you’ll receive a lump sum payout based on the type of injury and your policy’s schedule of benefits.
Yes. An AD&D insurance policy will generally cover death and dismemberment related to workplace accidents.
However, always verify coverage with your insurer. Like other types of specialty insurance products, such as disability insurance, AD&D coverage, exceptions and benefits can vary.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
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