Accidental Death and Dismemberment (AD&D) Insurance

Low cost AD&D insurance

Accidental Death and Dismemberment (AD&D) insurance provides coverage in case of death or dismemberment due to an accident.

AD&D insurance is typically sold as an add-on to a life insurance policy. For those who don't have life insurance or are only in need of AD&D insurance for a short duration, such as during travel abroad, they may benefit more from a standalone AD&D insurance plan. The premium of a standalone AD&D plan is usually low cost and can be insured for any amount, up to 10 times your annual income.

Accidental Death

As the name suggests, the insurance company will pay the death benefit amount in case of a death by accident. It will not cover death by sickness, illness, nonprescription drugs overdose, suicide or natural causes. Accidental death due to war and/or terrorism can be covered with a higher premium. There can be other exclusions, such as you have a heart attack while you are driving and you are killed in an accident, or you are admitted to the hospital due to an accident but you die from an infection acquired while in the hospital.

A deceased insured may have to undergo an autopsy to determine the real cause of death, which could cause delays in receiving payment made to the beneficiary from the insurance company.

Dismemberment

If you lose one member of your body (one hand, one leg or one eye in an accident), the insurance company will usually pay 50% of the death benefit. If you lose two such members of your body, the insurance company will pay 100% of the death benefit.

Group Basis

AD&D insurance can be purchased on either an individual basis or group basis. A corporation that is sending employees abroad can provide low cost protection to their employees.

Conclusion

AD&D insurance is a much lower cost alternative to long-term life insurance, but is certainly not meant to be a replacement of life insurance. If the unfortunate occurs and there is an accidental death of a breadwinner, the financial strain would be very difficult for the family. With Accidental Death and Dismemberment insurance in place, it can help pay a significant amount of expenses. It is worth it for your family to consider AD&D insurance.