What is covered by AD&D insurance?

Accidental death and dismemberment (AD&D) insurance pays out if you die due to an accident (like a car crash) or if you become paralyzed or lose a limb, hearing, sight or speech.

AD&D does not pay out if you die due to illness, disease or old age.

And AD&D policy will spell out what it will pay in a variety of circumstances. For example, a policy might:

  • Pay the full amount if you die accidentally.
  • Pay the full amount if you lose speech and hearing in both ears.
  • Pay out partial amounts (such as 25% or 50%) if you lose eyesight, a finger, thumb or a limb, or are permanently paralyzed. The policy will specify how much is paid for each cause.

Examples of accidental death

Is homicide considered accidental death?

Homicide is usually considered an accidental death for AD&D insurance, unless you were committing a crime or in combat when killed.

Exclusions to AD&D insurance

In addition to illness, diseases and old age, AD&D insurance typically won't pay anything for death or injury caused by:

  • Suicide.
  • War (declared or undeclared).
  • Intentionally self-inflicted injury.
  • Being intoxicated.
  • Voluntary consumption of poison, a chemical or drugs (except when prescribed by a doctor).
  • Getting on, leaving or being in an airplane unless you're a fare-paying passenger on a commercial aircraft.
  • Participating in an assault, felony or riot.
  • Medical or surgical treatment.

Is AD&D insurance necessary?

AD&D insurance likely isn’t necessary if you have a regular type of life insurance such as term life or whole life. These policies will pay out no matter what the cause of death (with a common exclusion of death by suicide within the first two years of owning the policy).

If your family would suffer financially if you died, a regular policy like term life insurance is a smarter choice because it covers more causes of death.

AD&D insurance through work

If you can get free or very inexpensive AD&D insurance through work, it's worth signing up because of the low cost.

You usually won't have to answer any health questions to get AD&D coverage at work. You'll name a beneficiary, such as a spouse, just as you would with a regular life insurance policy. The beneficiary gets the money if there's a death payout. You get the money if there's payment for an injury like loss of a finger.

AD&D insurance at work is generally offered in multiples of your annual salary. You might also be able to add a spouse or children for coverage.

The coverage will end when you leave the job, at a date specified by the policy.

AD&D can be a good supplement to regular life insurance, but it's not a replacement.