What does death and dismemberment insurance mean ?

The definition of accidental death and dismemberment (AD&D) is that it is an insurance policy that pays full benefits to the beneficiary in the unlikely event of accidental death and a certain percentage of these benefits in case of dismemberment (the partial or complete loss of a limb, fingers, toes, sight, hearing, speech and partial or permanent paralysis).

AD&D is an insurance form similar to life insurance but less expensive. In case the insured has both a life insurance and a supplemental AD&D policy both coverages will be paid to the beneficiaries in case of a deadly accident. One can also opt for a so-called accidental death policy/rider on top of a life insurance policy, so that in case of an accidental death both benefits will be paid ; this is called “double indemnity”.

In the United States there are four distinct types of AD&D group plans available: Group Life Supplement, Voluntary, Travel Accident and Dependents.

The most important things to keep in mind when considering an accidental death and dismemberment insurance policy are :

  • AD&D policies are usually very restrictive in their coverage, they only payout in case of “unlikely events”. If you want fuller coverage you should choose a life insurance.
  • No medical examination is required.
  • If the age requirements/restrictions are met acceptance is guaranteed. No one can be turned down due to poor health or (hazardous) occupation.
  • There is no waiting period, the coverage starts immmediately after payment of the premium.
  • Maybe the most important reason to get accidental death and dismemberment insurance is that it provides the insured with some peace of mind knowing that his loved ones will be taking care of financially in case the worst happens.
  • As always, read the fine print to see which events are covered (enumerated) in the policy and which are not.