Accidental Death and Dismemberment Insurance

Accidental death and dismemberment insurance or AD&D provides coverage in case of accidental death or loss of limb, like eyes, hearing or speech. If you die in an accident, your beneficiaries receive a predetermined lump sum, or you receive living benefits in case of bodily harm.

Key Points

Accidental death and dismemberment insurance policies are similar to traditional life insurance in that they pay benefits in case of death, but that’s where the similarities end.

What is Accidental Death Insurance?

Accidental death and dismemberment insurance is much like life insurance in that it pays a death benefit if you die. Unlike life insurance, however, it is very specific as to how you die. You must die in case of an accident only for the death benefits to be paid.

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Accidental Death and Dismemberment Insurance vs Life Insurance

Accidental death and life insurance both pay out in case of death, but there are other differences. AD&D coverage is faster and cheaper, and coverage is guaranteed. AD&D is a must if you have a high-risk job. You can even use it as a supplement to an already existing insurance policy. AD&D also pays for bodily harm, unlike traditional life insurance.

What is Covered by Accidental Death and Dismemberment Insurance?

What is considered an accident? Accidents at the workplace leading to death, loss of limb, blindness or paralyzation include:

• Suffocation
• Falls
• Choking
• Drowning
• Work-related machinery

AD&D coverage pays for loss of limb only due to an accident. These accidents do not have to be work-related and can be events such as car accidents, falling out a window or even a piano falling on your head.

Only accidental deaths are covered by an AD&D policy, but expect some limitations. Deaths due to drinking and driving, for example, may not be covered. Similarly, accidental overdoses aren’t covered. Also, expect some riskier activities to be excluded from coverage, like auto racing or bungee jumping. 

Most policies offer percentage-based coverage, depending on the type of claim and pay the full benefit for accidental death while paying a reduced benefit for other covered injuries. If an accident leads to death within 90 days following the accident, most policies will cover the claim fully.

Dismemberment is a broad term in an AD&D policy and may refer to the loss of a hand or a foot, but can also refer to other types of injuries, such as:

• Loss of hearing
• Loss of sight
• Loss of an index finger or a thumb

Insurers refer to the dismemberment portion of the coverage as “living benefits” and the provision works in a similar way to living benefits on a traditional life insurance policy. In both cases, you can access part of your policy’s coverage if you meet certain criteria.

Is Accidental Death Insurance Worth It?

Many people, especially those in high-risk environments, like the affordability and guaranteed acceptance of an AD&D policy. AD&D policies are better than life insurance when it comes to quick turnaround and cheap pricing. The limited scope of the death benefit allows for lower premiums than traditional life insurance.

Expect the living benefits to be a percentage of the full coverage amount or a fixed value. For example, the loss of a hand may pay 50% of the policy’s benefit, whereas the loss of a thumb might pay 25% of the policy’s benefit.

Some policies pay 200% (or even up to 400%) of the coverage amount for death or injury that results from accidents as a fare-paying rider on a bus, plane, train, or similar types of paid transport.

Average Cost of AD&D Insurance

Statistically, the risk of death from an accident is much lower than causes like heart disease, cancer or stroke. Because the risk of death is lower, policy premiums tend to be much lower as well when compared to a life insurance policy. For example, you might find AD&D coverage for as low as $4.50 per month for $100,000 in coverage. 

Some policies or riders provide a benefit as income replacement for a limited time if you have a qualifying disability. These policies can often cover more situations than a standard AD&D policy but may be more expensive on a monthly basis. 

We priced out a policy with $100,000 of coverage for accidental death coverage or accidental injury. The monthly rate was $10.45 for the policy with the broader accidental injury coverage compared to simpler policies at half the cost.

How to Get a AD&D Policy

In most cases, getting accidental death and dismemberment coverage is a simple process and often your coverage begins immediately. There is usually no medical exam and only a short questionnaire to complete as part of your application. If you’re approved — and most people are — coverage is bound by your payment.

Age is the primary factor used in qualifying applicants. Eligibility commonly begins at age 18 or 19 and ends at age 69 or 70 for new applicants. Coverage typically ends between ages 75 to 80. Health and occupation typically aren’t considered, although some activities may not be covered. 

For example, a rock climbing instructor may be covered for accidental death in an auto accident but a rock climbing accident may not be covered.

Life Insurance Provider Reviews

Benzinga partners with some of the best AD&D providers in the business. Here is a short list of just a few:

Best For

• Comparing multiple quotes to get the best price

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Best for Price Comparisons: Policygenius

Policygenius is a price comparison website that does all the work for you. It offers as much as 50% off the policies it finds — deals you can’t get anywhere else. The website offers helpful tools, informative articles, and even has licensed insurance agents on hand to answer all your questions.

Get started on quotes for AD&D insurance with the Policygenius calculator. With dozens of partnerships, Policygenius can connect you with the best insurance companies with the best rates. Because Policygenius is an independent broker, it has no allegiance to any one insurance provider — but to you, the customer.

How affordable is accidental death and dismemberment insurance? AD&D insurance is often more than 50% cheaper than term life insurance in both monthly premiums and lifetime cost of the policy. Standard AD&D policies can cost as little as $12.95 per month. That’s only a fraction of the cost of a typical term-life policy for ages 35 to 65.

Pros: 

• Multiple quotes
• Lowest prices
• Quotes in seconds
• LIVE help available
• Informative articles

Cons: 

• Limited partnerships

AM Best Rating: N/A

Moody’s Rating: N/A

Best For

• Comparing term life insurance policies

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Best for Prime Provider Partnerships: Quotacy

When it comes to having all the best life insurance companies in one place, there’s nowhere like Quotacy. Quotacy isn’t just a price comparison site, it specializes in getting you the best prices, but from only the best companies. Partners include:

• Nationwide
• John Hancock
• Mutual of Omaha
• Prudential
• AIG

These are just a few of the great insurance companies Quotacy works with. In fact, when searching for the best match for you, Quotacy pulls from a database of more than 25+ insurance companies, including Assurity. Quotacy has an A+ rating with the Better Business Bureau.

Quotacy offers, through Assurity, accidental death and dismemberment policies known as Acci-flex. Death benefits go as high as $300,000. Monthly premiums for someone age 30, with $300,000 in coverage, average $34 per month. For a $100,000 policy, a person also age 30 will pay on average just $12.50 per month. Assurity also offers a return of premium rider for AD&D policies.

Pros:

• No exam necessary
• Cash value policies
• Level premiums
• Online claims reporting
• Customer service hotline

Cons: 

• Annual fees
• Policies purchased through agent only

AM Best Rating: A- (Assurity)

Moody’s Rating: N/A

Best For

• Chronic Illness Coverage

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Best for Variety of Coverage Types: MetLife

MetLife, or the Metropolitan Life Insurance Company, is one of the largest insurance companies in the world with over 90 million customers in 60 countries. MetLife offers a vast array of insurance products including home, auto and life.

When it comes to AD&D, MetLife offers both basic and supplemental coverage, dependent and voluntary as well. What that means is that you can buy a standalone policy or get one to supplement your already existing life insurance coverage. You can buy it yourself or get it through your employer. AD&D policies from MetLife are available in all states.

Because medical exams are not required, there is no medical exam. Typically, this type of policy is picked up by your employer who pays the premiums. You do have the option, however, of adding extra coverage if so desired.

Pros:

• Available in all 50 states
• Rated ‘Superior’ and ‘Very Strong’
• Few customer complaints
• No medical exam
• Employer-paid policies

Cons:

• Few coverage options
• Limited options for people above 70

AM Best Rating: A+

Moody’s Rating: Aa3

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Best for Maximum Coverage: The Hartford

Founded in 1810, The Hartford is one of America’s oldest and most reputable insurance companies. The company is a leader in both mutual funds and group benefits, like accidental death and dismemberment.

The Hartford is available in all 50 states and offers AD&D insurance through the workplace. This flexible policy offered by employers is voluntary. This means that the employee will most likely be responsible for paying the premiums. Because of this, however, that means they choose the death benefit, up to $1 million or 10 times their salary.

There are certain benefits. The Hartford will waive premiums if the policyholder becomes disabled before their 60th birthday. They can also choose to add their spouse or child to the policy. Payouts for dismemberment usually fall between 25% and 100% of the policy’s face value.

Pros:

• Good customer service
• Policies offered through independent agents
• Many types of insurance offered
• BBB A+ rating
• Paperless option

Cons:

• Above average number of complaints
• Slow claims times

AM Best Rating: A+

Moody’s Rating: A1

Accidental Death and Dismemberment in Review

Accidental death and dismemberment policies are not available everywhere. They are narrowly-focused policies and do not cover everything a standard life insurance policy does. They are popular workplace policies, however, because the premiums are as much as 50% cheaper than term life. For the best life insurance information, check out more great Benzinga articles.

Frequently Asked Questions