What an Accidental Death and Dismemberment Insurance Policy Covers

Motorcycle on the road with ambulance behind itAn accidental death and dismemberment insurance policy covers precisely that— accidental death and dismemberment. But what does this mean?

It basically means that in case of an accident that leads to you losing one of your senses, such as eyesight, hearing, speech, or touch (limb), your AD&D coverage would provide payouts to you, or if you die, your beneficiaries. This form of disability insurance, however, comes with specific exclusions and restrictions.

What You Get

To obtain benefits due to an accident, your death or injury has to be a direct result of a particular accident that your AD&D insurance plan covers, explains an experienced financial planner in Columbia, SC. You could only collect benefits from your accidental death and dismemberment insurance plan if it is proven that your injury or death is a direct consequence of a qualifying accident.

Likewise, in case of death, it should have occurred within a particular timeframe specified in your insurance plan for your beneficiaries to receive the payout. You could purchase AD&D insurance separately, or as a life insurance policy rider. Do note though that when you buy AD&D insurance as a policy addendum or rider to your life insurance plan, it would be equal or near the value of your life insurance coverage, meaning that your payout would be double the amount of its original value.

With regards to the dismemberment coverage of AD&D insurance payouts, it mainly works on a per member basis. For example, your insurance provider would pay you 50% of the predetermined payout if you lost a member—eye, hand, limb, foot, hearing, or speech—and 100% of the payout if you lost two members.

The policy also covers complete or partial paralysis, but only up to 25% to 50%. You could likewise consider optional coverage such as coverage for your children and spouse, and hospital stays. AD&D insurance plans vary from one provider to another so make sure to read and understand the fine print when shopping around.

What You Don’t Get

In general, AD&D insurance coverage does not cover death due to a physical or mental illness, surgical procedure, drug overdose, hernia, or bacterial infection. Additionally, plenty of insurance providers won’t cover high-risk activities such as serving in a war, racing cars, and skydiving among others. With this in mind, it is immensely vital that you speak with different AD&D insurance providers to determine your options and understand every term and condition before buying anything.