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What is Voluntary Accidental Death and Dismemberment Insurance?

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What is Accidental Death and Dismemberment Insurance? 

Accidental death and dismemberment (AD&D) insurance provides lump-sum benefits if you’re injured, dismembered, or killed in unforeseen accidents or severe circumstances such as: 

  • Accidental death (e.g., car or plane crash) 
  • Murder 
  • Limb or finger loss (e.g., hand, foot) 
  • Eyesight, hearing, or speech loss 
  • Loss of movement
  • Paralysis 

Compared to workers’ compensation insurance, which only provides coverage for work-related accidents, AD&D insurance covers accidents wherever they occur, whether at work, on the road, or at home. Furthermore, AD&D policies can also provide coverage for dependents, such as spouses and children. 

In many instances, accidental death and dismemberment insurance is added as a supplement, or rider, to comprehensive employer benefits such as life and health insurance.  

Accidental death and dismemberment insurance isn’t a requirement, so plans are available on voluntary and employer-paid bases. Either way, you can also choose between different coverage limits.  

Unlike many other forms of health-related insurance, AD&D coverage isn’t subject to medical underwriting, even if you select high limits. In many instances, policies provide benefits for losses that occur within 365 days (one year). 

What’s the Difference Between AD&D Insurance and Accidental Dismemberment Coverage? 

Standalone accidental dismemberment policies only apply to injuries resulting in the loss of vital functions. Examples include speech, hearing, and necessary limb loss (e.g., leg, hand, etc.). 

Comparatively, an accidental death and dismemberment policy also covers death, paralysis, or other loss of movement and often includes coverage not just for the named insured but also for dependents such as spouses and children. 

Can You Expand Accidental Death and Dismemberment Insurance with Endorsements? 

A wide variety of endorsements exist that can expand basic death and dismemberment coverage, including: 

  • Accidental hospital income 
  • Adaptive home and vehicle coverage 
  • Bereavement counseling 
  • Newborn coverage 
  • Child education / Daycare 
  • Coma 
  • Critical burn 
  • HIV accident (occupational) 
  • Rehabilitation coverage 

These are just a sampling of the many endorsements you might be able to attach to your accidental death and dismemberment insurance. Call IHS Insurance Group today to learn about all of your options! 

Are There Any Common Exclusions When It Comes to Accidental Death and Dismemberment Insurance? 

Like most other insurance types, AD&D policies come with a long list of exclusions or scenarios where coverage doesn’t exist. While each carrier and state are different, here are a few of the most common: 

  • Incidents that occur while under the influence of alcohol, pr poisonous inhalants 
  • While serving in the armed forces 
  • While participating in a crime or riot 
  • Drug overdose 
  • Death caused by illnesses, such as heart attack (many companies include mental illness under this exclusion) 
  • Natural causes 
  • Death as a result of prior medical conditions 
  • An injury that incurred before coverage 
  • While racing, flying, or participating in professional or extreme sports (e.g., skydiving, scuba diving, etc.) 
  • Suicide or other self-inflicted injuries 
  • Injuries or death suffered during war 

How Much Does Accidental Death and Dismemberment Insurance Cost? 

While the amount you pay for accidental death and dismemberment insurance is directly tied to your limits and your age, it provides less coverage than traditional life or disability policies, so it’s meaningfully less expensive. 

For example, IHS represents carriers that price their AD&D insurance at around $4 per $100,000 in coverage. Others come in not-much higher at $6 per $100,000. 

Remember that rates increase exponentially the higher your limits go, so you might pay $30 or more per month if you increase your liability to $500,000. 

Many times, employers voluntarily offer AD&D insurance to their employees as a rider to their life insurance coverage, which can be paid by the company, employees, or a combination of both. Employers can pay for basic coverage in some instances, while employees can add endorsements (e.g., coverage for dependents) as they see fit. 

Who Should Purchase Voluntary Accidental Death and Dismemberment Insurance? 

If you have dependents who would experience financial duress if you were to fall ill unexpectedly, accidental death and dismemberment insurance is a good idea.

In fact, if money is extremely tight or you don’t qualify for traditional life or disability insurance, you might consider purchasing an AD&D policy to ensure you have some coverage in place should the unthinkable happen. 

How Can You Learn More About Accidental Death and Dismemberment Insurance? 

Because accidental death and dismemberment insurance features less coverage than traditional life and disability insurance policies, it shouldn’t be considered an adequate replacement.  

However, AD&D coverage can be useful if you have no other coverage in place or an employer who’d like to increase your employees’ insurance offerings. It’s a complicated landscape, so the team at IHS Insurance Group is standing by to answer your important questions! 

Do you need a FREE Quote or have questions regarding commercial insurance? Please fill out our quickGET A FREE QUOTEform, and an agent will get back to you at your convenience!      

We look forward to speaking with you today!

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