What Is Accidental Death vs. AD&D Insurance?

Are you, for whatever reason, the kind of person who’s worried about the impact a sudden accident might have on your family? If so, there are two common kinds of accidental death policies you might want to know about. Accidental death insurance and accidental death and dismemberment insurance can both offer coverage to protect your family if something were to happen to you in an accident.

So which policy comes out ahead? Both kinds of insurance can make sense for different people. Take a careful look at what is (and isn’t) included in a policy to decide which option will be the best value for you.

What It Means to Be Covered Against Accidents

Accidental death (AD) insurance and accidental death and dismemberment (AD&D) insurance often get lumped together, but they’re not totally interchangeable.

Both policies are forms of insurance that don’t require a medical exam. Coverage is essentially guaranteed as long as you fit the qualifying age (and, in some cases, occupation). Both AD and AD&D insurance cover a specific set of accidental circumstances, as opposed to the broader coverage of a policy like term life.

In other words, if you were to pass away due to an illness (e.g., cancer) or an accident (e.g., car crash) while your policy is in force, term life insurance would pay money to the beneficiary you’ve chosen. They could use the money for whatever they need, from your final expenses to their daily cost of living. With AD or AD&D insurance, your beneficiary would receive the funds if you passed away due to an accident, but not if you died due to an illness.

What exactly counts as a qualifying accident can vary from company to company, but you may see coverage for accidents such as:

• Motor vehicle accidents

• Drowning

• Fires

• Falls

• Exposure to the elements

• Choking

You’ll also generally see exclusions for certain types of deaths:

• War or riots

• Death while over legal limits of drugs or alcohol

• Racing

• Extreme sports

• Accidents while committing or attempting to commit a crime

• Illness

• Natural causes

• Suicide

The Big Difference Between AD and AD&D

The real distinction between AD and AD&D insurance is that extra “D” for “dismemberment.” You may be entitled to an AD&D benefit even if you survive an accident, if you sustain a qualifying injury. Read AD&D policy details closely to understand which injuries qualify, when you would get a full or partial benefit and what the maximum benefit is (e.g., if you are involved in multiple accidents).

What is dismemberment?

Dismemberment injuries do all meet a certain threshold of severity, but they may encompass a wider range of situations than you might think. Dismemberment, in insurance terms, tends to refer to an injury involving loss of a body part or loss of a major body function. Partial or total paralysis, loss of sight or hearing in at least one side, or loss of a limb would count as forms of dismemberment.

Insurers also don’t necessarily weight all injuries equally. Some companies may offer partial payouts, such as 50 percent of the benefit if you lose sight in one eye, for example.

Is AD&D Worth It?

If you’re trying to choose between AD and AD&D insurance, how much value should you put on coverage for dismemberment? Several factors can make a difference.

First, consider your lifestyle and comfort level with risk. Some people may believe they lead a very low-risk life (e.g., working from home, touring museums for fun). Others may identify more as thrill-seekers and enjoy higher-risk activities like rock climbing or motorcycle riding. But feelings about risk are subjective. You could lead what most people around you consider to be a quiet life and still feel conscious of potential accidents at home, for example. If having financial coverage in case of accident would offer you peace of mind, AD&D insurance might be worth exploring.

Next, read over any exclusions carefully because they can vary by insurance company. AD&D insurance won’t be much benefit if your favorite activities are on the exclusion list. If you’re a biker, an AD policy that covers motorcycle accidents could be a better fit than an AD&D policy that doesn’t. Some insurance providers may offer coverage for specific circumstances where someone has an accident while flying a plane, as another example, while many others don’t. If you’re interested in accident coverage because of your piloting hobby, your main focus may be finding any policy that covers this particular accident risk.

Then, consider cost. If you can find an AD policy at the same price as an AD&D policy, then the dismemberment coverage might feel like a free benefit. But if the AD&D policy has higher premiums, consider what are you paying for the dismemberment aspect of the plan.

Specifically, what is dismemberment coverage worth to you? Is an extra $5 worth paying to have protection for qualifying injuries? An extra $15? It’s an individual decision. Your budget, risk tolerance and the limits and offerings of the coverage may all factor into your choices.

What Do AD and AD&D Cost?

Comparing premiums directly between AD and AD&D is nuanced because most insurance companies offer one or the other, not both. In articles and educational materials, it’s common to see AD and AD&D get grouped together compared to term life, so if you see an AD&D rate chart, read carefully because there may be some accidental death-only policies included on the list.

The cost of monthly premiums vary widely enough that it’s possible to find AD policies that cost more than AD&D policies for the same coverage (meaning you could pay more for a policy that covers fewer situations). Here are a few signs to look out for to get the best coverage available for you:

1. Age categories: Many companies offer rates for AD or AD&D policies based on a broad eligible age (e.g., 25-50, 18-69). Companies that structure rates in age tiers (e.g., 35, 45 and 55) may have higher premiums depending on your age.

2. Premiums and benefit value: If you shop around, you can find multiple AD policies that offer $100,000 of coverage for less than $10 per month. Most AD&D policies we’ve seen cost at least $10 per month for the same coverage. It’s up to you to determine whether the dismemberment option is worth an additional monthly cost.

3. Exclusions: Insurance providers set their exclusions differently. Some policies exclude any deaths related to flying an airplane, while others cover pilots under certain circumstances (e.g., non-commercial, below a maximum number of flight hours annually). Any accident-related policy will cover a narrower set of situations than term life insurance, but comparing options may help you find policies that align best with the activities you enjoy.

4. Renewal limits: Some policies let you renew coverage until age 60, others to age 80. Accidents are a more common cause of death for younger people than seniors, so you might choose a lower premium even if it means a lower age limit, or you may feel more secure with coverage for as long as possible.

Ultimately, a choice between AD and AD&D coverage comes down to your lifestyle and your comfort preferences with insurance. Accidents can be a part of life for anyone. The question is how much you want to factor them into your future preparations, and how well different policies would fit the risks you see as the most important to cover.

Fabric exists to help young families master their money. Our articles abide by strict editorial standards.

Information provided is general and educational in nature, is not financial advice, and all products or services discussed may not be offered by Fabric by Gerber Life  (“the Company”). The information is not intended to be, and should not be construed as, legal or tax advice. The Company does not provide legal or tax advice. Consult an attorney or tax advisor regarding your specific legal or tax situation. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. The Company makes no warranties with regard to the information or results obtained by its use. The Company disclaims any liability arising out of your use of, or reliance on, the information. The views and opinions of third-party content providers are solely those of the author and not Fabric by Gerber Life.