Accidental Death and Disability Insurance Alone is Not Enough

Accidental Death and Disability Insurance Alone is Not Enough

by Leslie Freeland, April 28, 2017

AD&D Insurance provides some insurance coverage….

but it’s not a replacement for a full life insurance policy.


This kind of insurance will only pay out money to you or a loved one in the event of death or disability that is directly caused by an accident.

There are some benefits to this type of insurance policy. However, it is not an alternative to full life insurance policies for many reasons, as covered below.

How AD&D Insurance Defines Death

If you die in an accident (such as a car accident), 100% of the insurance money specified in the policy will be paid out to your loved ones. The insurance company will not pay for death due to an illness, unexpected medical issue such as heart attack or suicide.

The insurance company will also not pay if the accident was not the direct cause of your death.

For example, if you are in a car accident but then die in a hospital because of an infection, your family will not get anything.

If you have an accident after you drink alcohol or take drugs, this will not be covered by the policy. Dangerous sports are also commonly not covered – check each policy for a full list of sports and activities that are not covered.

Due to these restrictions, the insurance company will usually ask for an autopsy to confirm the cause of death before making any payments.

How Dismemberment or Disability Is Defined in AD&D Insurance

As well as covering accidental death, most policies will pay out a smaller amount of money if you are not killed in the accident but lose a limb or another body part such as an eye.

The portion of the money you get depends on the wording of the policy.

For example, you might receive half of the insurance money if you lose an arm or a leg in an accident. Some policies will pay out 100% of the insurance money if you lose two limbs. You might get a smaller amount of money if you lose fingers or toes.

Some AD&D insurance policies will also pay out money if you suffer another type of disability due to an accident such as loss of hearing or paralysis. The disabilities covered by each policy and the amount of money paid out for these disabilities will be clearly defined in the policy wording.

Benefits of AD&D Insurance

  • It’s cheap – as this kind of insurance only covers death and disability due to accidents, which is not a common cause of death, it is usually much cheaper than full life insurance and can cost as little as $50 a year.
  • It’s suitable for those in high-risk jobs – if there is a high risk of you dying or receiving a serious injury at work, AD&D insurance could be a practical addition to your standard life insurance policy.
  • It’s easy to understand – because AD&D policies are so limited in what they cover and clearly set out the money you will receive after death or dismemberment, there is usually no confusion in trying to work out what the policy covers.
  • You do not need to be in good health to get a policy – unlike other kinds of life insurance, AD&D insurance is not dependent on your current health status. You can get a policy even if you have ongoing medical conditions. You won’t need a medical exam to apply. You won’t even have to fill out a health questionnaire.
  • It can be cancelled whenever you want – usually, there is no minimum time you must pay into an AD&D policy to qualify for your benefits. If your financial circumstances change or you decide it’s not a good option for you anymore, you can cancel immediately.
  • It covers dismemberment and disability – most life insurance policies will not pay you anything if you become disabled unless you choose to buy AD&D coverage as additional insurance.
  • You can buy it separately or as an add-on to a standard life insurance policy – this also means it will pay additionally to any other insurance you have that covers accidents.
  • It offers “double indemnity” – AD&D purchased as a “rider” or add-on to a normal life insurance policy will usually pay out double the amount of money if you die in an accident than if you had only standard life insurance.
  • Some policies offer additional payouts if you die due to an accident while traveling as a passenger by plane, taxi, or public transport – the insurance money paid to loved ones after this type of accidental death might be double or triple the usual amount.

Drawbacks of AD&D Insurance

  • Coverage is limited – it’s important to realize that this kind of policy only covers death or serious disability caused by accident. If you die because of a medical condition, even if the medical cause is linked to the accident, the insurer will not pay. For example, if you have a heart attack while driving that causes you to crash the car, this type of accident would not be covered.
  • Death has to occur within a short time frame – AD&D policies have a defined period in which death must occur after the accident for any money to be paid out. If your policy sets out a 90-day limit, but you die 91 days after an accident, your loved ones will not receive any payment, even if the accident directly caused your death.
  • The cause of death must be proven to be an accident – this may involve a long and in-depth investigation, which can be distressing for your family, and it may take some time for them to receive the payout.
  • It may not be a worthwhile investment when purchased by itself– accidents cause only a small percentage of deaths in the USA, so unless you are regularly involved in high-risk activities, it may not be worth paying for this type of policy. Most AD&D insurance policies are never claimed.
  • Many high-risk activities are not covered – if your hobby is skydiving, car racing, or another extreme sport, AD&D insurance will probably not cover you for accidents involving these activities as the risk of death or injury is so high.
  • It has no cash value – this means no money will be paid out when you cancel the contract, unlike some permanent life insurance policies.

AD&D Insurance Questions and Answers

Q: Do you have to renew AD&D insurance policies?

A: If you’ve chosen AD&D coverage as an optional extra for your life insurance policy, it will usually be renewed at the same time as your normal life insurance if the life insurance allows renewals. You must check with your insurance agent because this really varies depending on the insurance company. Most standalone AD&D policies may be renewed periodically. The terms may change slightly but the amount you pay for the policy will usually not increase significantly over time. You can usually cancel an AD&D policy whenever you want, and you don’t have to renew if you choose not to.

Q. Does AD&D insurance added to life insurance as an add-on or “rider” cover disability/dismemberment as well as death?

A: It’s important to read the terms of each insurance policy. Most policies offer cover for disablement or dismemberment when you add AD&D as a rider, but some only cover accidental death. Again, check with your insurance agent for details.

Q. Will AD&D insurance pay out if the accident is your fault?

A: If the accident is partially your fault, such as a car accident caused by you hitting someone behind because you didn’t break in time, but it was clear that you did not intend to cause the accident, you or your loved ones should still be eligible for a payout.

If the accident was obviously your fault, for example, you ran a red light, this may be considered as an attempt to hurt yourself or commit suicide and would not be covered. Any accidents that happen while you are drunk or under the influence of drugs will not be covered. The insurance company will fully investigate all accidents before they pay out any money.

A nice addition – probably not enough alone

AD&D insurance can be a nice addition to a full-coverage life insurance policy, and it’s an inexpensive way to increase your coverage.

If you choose to add AD&D onto to your regular life insurance, this is called a “rider,” and it will usually pay out the same amount as the full-coverage life insurance policy if you die in an accident.

This means your loved ones will receive twice the amount of money they would have if you had a full-coverage life insurance policy only.

However, as most people will not die in an accident, AD&D insurance is not enough to protect your family and loved ones when purchased alone, as the chances of them receiving money after you die from this type of policy are very small. If you pay into an AD&D policy for many years but then die from an illness, your family will receive nothing unless you also have a full-coverage life insurance policy.

So for maximum coverage and financial protection, it’s highly recommended you purchase a full-coverage life insurance policy first with an AD&D rider.

Get Fully Covered




Asurea offers Life Insurance, Mortgage Protection Life Insurance, Medicare Supplement Insurance, Final Expense Insurance, Disability Insurance, Long-term Care Insurance, Retirement Planning products and more. For additional information, click on the ‘Learn more’ button below. Want to have articles just like this delivered to your inbox? Just enter your email address in the box below and click ‘Subscribe.’

This information is provided for general consumer educational purposes only and is not intended to provide legal, tax or investment advice. Dollar amounts are for illustrative purposes, not actual.

Leslie Freeland

Leslie Freeland

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Leslie joined Asurea as the Marketing Communications Coordinator in February 2015. Since then, she has been working closely with insurance professionals to educate the public on the importance of life insurance and protect the public from common scams with informational articles.
Leslie Freeland