Death is a bitter and unforgettable truth of our lives. However, there is a big difference between natural death and accidental death especially when you hold an insurance policy. When you first think, accidental death seems quite simple without any need for explanation.
But that’s not the case because now there are a lot of inquiries asking about exactly the cause of accidental death. You may also be surprised by knowing the wide range of coverage and the benefits of accidental death offered in an insurance plan. According to insurers, accidental death is a loss of life due to any reason other than natural. Here natural causes include disease and older age.
Might be you want to know more about accidental death, types of deaths and injuries covered by insurance plans, and other things related to it. We want to clear all your confusion about accidental death, so read on to learn more about it.
What is considered Accidental Death?
In the United States of America, accidental death is defined as the end of life due to any unexpected event or happening (accident). Any death that is not expected, intended, or anticipated. It includes deaths from vehicle crashes, choking, drowning, slips, machinery, and any other incident that won’t be controlled. As a result of fatal accidents, mostly death must occur within a period specified in the insurance plan.
What types of deaths are included in accidental deaths?
Here are some examples of death considered accidental deaths:
- Automobile accidents including public transportation
- Drowning and falls
- Air, water, or train transport accident
- Fire-related death like burns, asphyxiation, or falling objects into the fire
- Complications arising due to medical malpractice
- Industrial accidents including explosions, equipment malfunctioning, or mining accidents.
What is AD & D insurance?
AD and D Insurance is the abbreviation of accidental death and dismemberment insurance that refers to a person’s health or life insurance plan. The “death” portion of the policy’s name refers to a death that is caused by an accident. Meanwhile the “dismemberment” part of the name indicated any loss of or loss of use of a body part of function. It may include the loss of speech, hearing, or eyesight, loss of a limb, hand, and others.
How does AD and D insurance plan work?
This insurance policy works similarly to a health or life insurance plan. If you go through an event covered by the policy, the insurer has to pay a pre-defined benefit to you or the designated beneficiary. The coverage of this supplemental insurance policy will be received according to the situation of death or dismemberment.
The dismemberment allows for about 50% of the policy limit in case of the loss of one thing like eyesight or speech. But the coverage increases with the loss of two or more body parts or maybe functions. However, AD and D insurance will not pay any coverage for death that happened due to natural causes including illness and even suicide.
Accidental death insurance is secured via a work benefits package as a part of a life insurance plan. On the other hand, accidental death and dismemberment can also be seen as a stand-alone policy. It can be obtained through an insurance company and the costs will be lower than traditional policy because the coverage is limited to death and injuries only caused by accidents.
If you have AD & D coverage along with a life insurance policy, your beneficiary will get the payout from both insurance policies in case of your death by an accident. It is known as double indemnity. Moreover, AD & D also doubles or triples the payout if you die an accidental death like a fare-paying passenger on some public transport like a ferry, taxi, bus, or train.
What does accidental death and dismemberment policy cover?
AD & D insurance policies are a type of limited life insurance. The beneficiary will get a lump sum from the insurance company after the death of the insured or suffers any dismemberment in an accident.
As mentioned earlier, you can be covered by this policy as a rider to your life insurance plan (double indemnity). Additionally, you can also get coverage via separate policies bought from an insurer, bank, credit union, or credit card company. Luckily AD & D insurance can also be obtained through your or your loved one’s employment. Some of them cover dependents of the employee along with the employee while others cover only accidents occurring when the employee is traveling on the employer’s business.
Note that all the above-mentioned examples of accidental deaths are covered by AD & D insurance.
What are the types of deaths or injuries not covered by AD & D insurance?
The policy comes with a lot of exclusion so it’s necessary to read the terms and conditions of the policy carefully. Before buying the plan ensure that you understand what is covered and not covered by it. Some examples of exclusions are here:
- Death from natural causes, suicide, or illness.
- Injury or death occurs from driving after drinking alcohol.
- Deaths due to high or overdose of drugs.
- Injuries or death due to a riot.
- Injuries or deaths result from extreme sports or risky hobbies like car racing, sky-diving, scuba-diving, etc.
- Death or injuries during a war or due to armed service.
- Deaths after non-disclosure or a wrong statement on the policy application.
What are the advantages and drawbacks of an accidental death and dismemberment insurance policy?
Benefits of AD & D
- It is cheaper than a term life policy.
- No health or medical questions will be asked of the applicant.
- It will provide great satisfaction and peace of mind financially in case of any incident that could lead to death.
- If AD & D is added along with a term life insurance, it will provide a double death benefit to the designated beneficiary of the policy.
Drawbacks of AD & D
- The policy will pay out only after your death.
- Many insurers don’t provide death benefits in case you die during a medical treatment, drug overdose, or any other illness.
- Partial payouts for the loss of limbs or any other body part or function.
Which life insurance companies are offering AD and D policies?
Accidental death and dismemberment are available in most of the insurance companies but some of them sell the plan to their employers only who then award them to employees as an advantage.
However, here are some of the insurers from whom you can buy this policy:
- AIG Direct
Also Read: 2023 Best Life Insurance Companies
Frequently Asked Questions (FAQ)
1- What is the monthly premium cost of AD & D?
The monthly premium cost of accidental death and dismemberment depends on various factors. These may include the coverage you need, your age, and the insurance company from whom you buy the plan. Typically, the premiums of AD & D are very affordable.
2- Can you add an AD & D insurance policy to your life insurance plan?
Yes, you can add an AD & D policy to your existing life insurance plan. Most insured add AD and D as optional riders to their life insurance policy to get supplemental benefits in case of an accident or injury. However, if you have both coverages and you die due to a covered accident by policies, the policy’s beneficiary will get twice the benefit.
3- How much AD & D insurance coverage do you need?
A lot of people find it very challenging to decide how much coverage they have to buy in an accidental death and dismemberment insurance policy. To make it easy for you, evaluate that your lump sum will be equal to at least enough to cover your salary for a year. Some financial advisors recommend the coverage to be as high as ten times your yearly salary but maybe your budget does not allow you for that.