Accidental Death and Dismemberment – AD&D Insurance
Accidental death and dismemberment insurance, also known as AD&D insurance, is supplementary coverage which can be added to traditional life insurance policies. AD&D life insurance offers extra protection in the event of an accidental death or being gravely wounded in an accident, which could greatly ease the financial burden of such an unfortunate incident’s aftermath. Whether accidental death and dismemberment coverage is worth the extra premium is the question to ask when you compare life insurance quotes and rates.
What Is Accidental Death and Dismemberment Insurance?
AD&D insurance is supplemental life insurance which will pay the policyholder or their beneficiaries a certain sum of money should the insured be killed or dismembered in an accident. Accidental death insurance is the main part of the policy, with the dismemberment portion being supplementary to it. “Dismemberment” is defined by life insurance companies as the loss of a “member”, meaning a limb (arm, leg, hand or even finger), a significant sense such as sight or hearing, or paralysis.
How Does AD&D Work?
If a policyholder dies as a direct result of an accident, a full death benefit will be paid out to the policy’s beneficiary. If the policy amount is for $100,000, the benefit will be $100,000. If the policyholder does not die as a result of such an accident, but instead loses a limb, he/she will receive a 50% benefit payout. Losing two or more limbs would compound for a full benefit payment. Conversely, if the policyholder loses a finger, toe or is only partially paralyzed, the benefit payout will be graded down according to the insurer’s loss benefit scale. Read the fine print carefully.
Coverage Benefits and Exclusions
AD&D insurance will pay out for accidents such as homicide, falls, vehicle accidents, drowning and other events which weren’t the policyholder’s fault. A “qualifying” death or injury has to occur within a short time after the accident and has to be a direct result thereof. Deaths or dismemberments from engaging in “extreme” sports or risky behaviors, or from infections or illness are not covered by an accidental death and dismemberment insurance policy. AD&D insurance can be extended to cover hospitalization after the accident and coverage for dependents. A life insurance quote will help determine how much this all will cost, as well as provide a comparison of life insurance policies offered by the best life insurance companies.
Double Indemnity Coverage
AD&D insurance frequently refers to “double indemnity” policies because AD&D can end up paying out double the normal life insurance benefit. This is possible because AD&D insurance can be added on as a rider to the original life insurance policy with an equal payout amount. For example, if the main life insurance policy has a payout benefit of $150,000 with an AD&D rider for the same amount, the beneficiary receives a total of $300,000 for a qualified accidental death. Despite the potential benefits, it is important to compare rates and figure out if the increased premiums are worth the benefits.
What Are The Disadvantages?
The fact is that most people won’t actually die or be severely injured because of an accident. Accidental death and dismemberment insurance is so specific in what it does and does not include that the chances of using this part of your life insurance are quite low. Basically, the same kind of coverage is given by most life insurance policies with fewer types of exclusions and at cheaper rates. So, it can be inferred that this coverage isn’t really necessary in most cases and is something of a waste of money.
How Can AD&D Insurance Be Purchased?
Accidental Death and Dismemberment Insurance can be bought from a variety of sources such as from your current life insurance company, a completely new company as a stand-alone policy, or even from banks, credit unions and credit card companies. Some health insurers also include AD&D insurance with employer group plans. It is inexpensive, averaging around $60 per year.
However, since the benefits accrued would likely be minimal, the best use of your premium dollars might be better spent on increasing benefit amounts on existing life insurance policies.
Life Insurance Quotes
In order to make the best decision for your situation, consumers should compare multiple life insurance quotes. By entering your 5-digit zip code in the box provide, TheLifeInsuranceQuote.com helps you find the cheapest life insurance quotes and rates online, for policies with the best benefits and coverage. Finding and comparing affordable AD&D insurance is instant, free, and easy, ensuring you find the best life insurance and company for your needs.
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