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Accidental death and dismemberment insurance (AD&D)
A policy can protect your family if you're in an accident — but not if you get sick.
Accidental death insurance can help provide for your loved ones if you’re injured in an accident. But if you want to make sure your family is covered no matter what happens to you, you may be better off with a traditional life insurance policy.
What is accidental death insurance?
Accidental death insurance pays a lump sum benefit to your family or named beneficiary if you die in an accident. But it won’t pay out if you die from an illness, disease or underlying medical condition.
Accidental death and dismemberment (AD&D) can also pay out if you’re seriously injured in an accident but survive. For example, a policy might pay out 25% of your benefit if you lose a leg or an arm.
Compare policy providers that offer accidental death insurance
How common are accidental deaths?
According to the CDC, people between the age of 25 and 34 are at the highest risk for dying from an accident, closely followed by people in the 45–54 range.
|Accidents||Number of deaths in 2016|
|Hanging, strangulation and suffocation||6,610|
|Exposure to smoke, fire and flames||2,730|
Source: National Vital Statistics Report Volume 67, Number 5 (published July 2018)
How is accidental death insurance different from life insurance?
While life insurance will cover dying in an accident, it can also pay out if the insured is diagnosed with a terminal illness or dies from a disease or medical cause. It’s generally more expensive than accidental death insurance, but your family will be taken care of no matter how you die.
Why would I consider accidental death insurance over life insurance?
Accidental death insurance is generally cheaper than life insurance and easier to qualify for, making it a popular option for people who can’t afford life insurance or don’t qualify for a policy.
It’s also generally quicker and easier to apply for. You won’t need to take a medical exam, and the application will be much less detailed than what you’d have to fill out for life insurance. Some providers can eve offer same-day coverage.
How are premiums determined?
Your premiums will be based on how likely you are to die in an accident. Your insurer will factor in your:
- Age. Some age groups are statistically more likely to die in an accident.
- Gender. Men will generally have higher premiums.
- Occupation. Applicants with high-risk occupations will likely pay more for insurance.
- Hobbies. People with high-risk hobbies, like motorcycle riding and rock climbing, will generally pay more.
- Policy. The amount you’re insured for, how often you make payments and what benefits your plan offers will all affect your premiums.
What should I look for in a policy?
Features to look for when comparing policies include:
- Benefit amount. Decide how much coverage you need and look for a company that help.
- Guaranteed acceptance. Many policies won’t require any medical underwriting.
- Guaranteed renewable. Some policies guarantee that you’ll be eligible for renewal if you make your payments on time.
- Worldwide coverage. Look for a policy that covers you anywhere in the world so that your loved ones will be protected if you’re in an accident while traveling.
- Accidental injury benefit. Consider whether you need an accidental death and dismemberment (AD&D) policy, which will pay out a percentage of your benefit if you’re seriously injured.
- Car accident benefit. Some policies will pay an additional amount if the policyholder dies as a result of a car accident in which they were wearing a seat belt.
- Indexation. Look for a policy with a benefit that increases each year to keep up with inflation.
- Discounts. Some policies will offer a discount if you take out joint coverage with a spouse, increase your level of coverage or bundle it with your other insurance policies from the same company.
When am I not covered?
Exclusions will vary from policy to policy, so read the contract carefully before signing anything. Common exclusions include death or dismemberment by:
- War, hostilities or civil unrest
- Bungee jumping or skydiving
- Drunk driving
- Drug overdoses
- Accidents while engaging in an illegal act
- Accidents while participating or training in professional sports
Accidental death insurance can provide peace of mind for people who don’t qualify for or can’t afford traditional life insurance. But if you’re relatively healthy, you may be better off comparing life insurance policies to find a more comprehensive option that fits your budget.
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