Accidental Death and Dismemberment (AD&D) Insurance

What Is Accidental Death and Dismemberment (AD&D) Insurance?

Accidental death and dismemberment (AD&D) insurance is insurance—usually added as a rider to a health insurance or life insurance policy—that covers the unintentional death or dismemberment of the insured. Dismemberment includes the loss—or the loss of use—of body parts or functions (e.g., limbs, speech, eyesight, and hearing).

Because of coverage limitations, prospective buyers should carefully read the terms of the policy. For instance, AD&D insurance is limited and generally covers unlikely events. Also, it is supplemental life insurance and not an acceptable substitute for term life insurance.

Key Takeaways

  • Accidental death and dismemberment (AD&D) insurance is usually added as a rider to a life insurance policy.
  • AD&D insurance pays benefits in the case of a person’s accidental death or dismemberment, which is the loss—or loss of use—of body parts or functions.
  • AD&D insurance usually comes with significant coverage limitations, so always read the fine print.
  • AD&D does not pay if the insured died due to natural causes, such as cancer or heart disease.
  • Known as double indemnity, AD&D may pay a benefit equal to or a multiple of (usually 2x) the regular insurance's face amount.

Accidental Death And Dismemberment Insurance

Understanding Accidental Death and Dismemberment (AD&D) Insurance

AD&D insurance contains a schedule that details the terms and percentages of the various benefits and covered special circumstances. For example, if an insured dies from injuries sustained in an accident, the death must occur within a specified period for benefits to be paid.

Accidental Death

When adding an AD&D rider, also known as a “double indemnity” rider, to a life insurance policy, the designated beneficiaries receive benefits from both in the event the insured dies accidentally. Benefits typically cannot exceed a certain amount. Most insurers cap the amount payable under these circumstances. As most AD&D insurance payments usually mirror the face value of the original life insurance policy, the beneficiary receives a benefit twice the amount of the life insurance policy’s face value upon the accidental death of the insured.

Typically, accidental death covers exceptional circumstances, such as exposure to the elements, traffic accidents, homicide, falls, drowning, and accidents involving heavy equipment.

AD&D insurance is supplemental life insurance and not an acceptable substitute for term life insurance.


Most AD&D policies pay a percentage for the loss of a limb, partial or permanent paralysis, or the loss of use of specific body parts, such as the loss of sight, hearing, or speech. The types and extent of injuries covered are particular to and defined by each insurer and policy. It is uncommon for a policy to pay 100% of the policy amount for anything less than a combination of the loss of a limb and the loss of a major bodily function, such as sight in at least one eye or hearing in at least one ear.

Voluntary AD&D

Voluntary accidental death and dismemberment (VAD&D) insurance is an optional financial protection plan that provides a beneficiary with cash if the policyholder is accidentally killed or loses certain body parts. VAD&D is also a limited form of life insurance and is generally less expensive than a full life insurance policy.

Premiums are based on the amount of insurance purchased, and VAD&D insurance is typically purchased by workers in occupations that place them at high risk of physical injury. Most policies are renewed periodically with revised terms.

How much such a policy pays depends not only on the amount of coverage purchased but also on the type of claim filed. For example, the policy might pay 100% if the policyholder is killed or becomes quadriplegic, but only 50% for the loss of a hand or the permanent loss of hearing in one ear or sight in one eye.

Special Considerations

Each insurance provider includes a list of exclusions. In most instances, the list includes suicide, death from illness or natural causes, and wartime injuries. Other common exclusions include death resulting from the overdose of toxic substances, death while under the influence of nonprescription drugs, and the injury or death of a professional athlete during a sporting event. Usually, if the insured’s loss occurs because of a felonious act on his or her part, no benefit is payable.

Many companies today offer optional AD&D coverage to employees as part of their benefits package.

Advantages and Disadvantages of AD&D Insurance


Accidents are the third leading cause of death in the United States. An accidental death not only impacts the surviving loved ones emotionally but also financially as they now deal with the sudden loss of income. The death benefit from an AD&D policy can add peace of mind by lessening that burden.

Because the loss of income will carry forward, AD&D policies provide a death benefit in addition to the death benefit offered through the traditional life insurance on the insured. The death benefit amount is usually equal to or some multiple of the traditional policy's death benefit amount. This extra benefit is known as double indemnity as the benefit usually doubles with this added feature.

Because coverage is limited to certain events causing accidental death or loss of limb, premiums are relatively inexpensive. If offered through an employer, participating employees may realize a cost of a few dollars per month. Even when purchased individually, the costs are considerably less than rates for term insurance offering the same face amount.


This limited coverage can also be disadvantageous to policyholders because it only pays upon certain events. If death occurs outside of these limitations, the AD&D policy does not pay. Premiums paid are forfeited and remain with the insurer. For example, if someone dies from the result of a terrorist attack, no benefit is paid because that is considered a wartime act. Insurers have the ability to make exceptions to this as was done for victims of the 9/11 terrorist attacks in the United States.

The leading cause of death in the United States is due to heart-related issues. Therefore, it is likely that someone will die from natural causes before they die from an accident, especially for those not engaged in risky work and older adults.

If coverage is group or employer-sponsored, it may not be portable if the insured leaves the group or employer. Oftentimes, coverage terminates upon the termination of the insured's affiliation with the sponsor, leaving them unprotected until new coverage is issued.

Also, having AD&D may give policyholders a false sense of security when including the face amount in their cumulative life insurance totals during planning. Because AD&D only pays upon certain events, it should not be used to determine if a customer's life insurance portfolio is balanced. Traditional life insurance should be adequate to provide necessary financial support to the beneficiaries. AD&D supplements in the event that death occurs from an accident. It adds an extra benefit for the sudden and unexpected departure of the insured.

  • Provides financial assistance resulting from an accidental death or loss of limb

  • Supplements loss of income beyond initial loss

  • Costs less than traditional life insurance

  • Pays only for certain events

  • Terminates upon the insured's termination with the sponsor issuing coverage

  • Gives a false sense of security if regular life insurance is not adequate

How Is AD&D Different From Life Insurance?

Accidental death and dismemberment (AD&D) coverage only pays a benefit if death results from a covered accident or upon the loss (or loss of use) of a limb. In contrast, coverage is broader with life insurance. Life insurance policies pay death benefits upon the death of the insured, despite how the death occurred (exceptions apply per policy).

What Does an AD&D Policy Cover?

AD&D policies cover the accidental death of the insured or the loss (or loss of use) of the insured's limb. Not all accidental deaths are covered, however. For example, accidental deaths caused by the insured's felonious act and wartime acts are generally not covered. Each policy provides policy specifications and a list of exclusions.

Does AD&D Cover Heart Attacks?

Although unexpected, a heart attack is considered a natural cause of death and is, therefore, excluded from AD&D coverage. There is one exception to this exclusion. If the heart attack was precipitated by the accident, most AD&D policies will pay the stated benefit. For example, if an insured, with no underlying heart issues, has a heart attack immediately after a catastrophic car accident and subsequently dies, the policy will pay.

Does AD&D Cover Cancer?

Like a heart attack, cancer is considered a natural cause of death and will not prompt payment from the AD&D policy.

How Much Does AD&D Insurance Cost?

AD&D coverage is relatively inexpensive compared to traditional (term) and whole life insurance. Costs can be as little as a few dollars per month. However, rates vary according to the type of AD&D coverage issued and the insurer.

The Bottom Line

Accidental death and dismemberment (AD&D) insurance is an insurance policy that pays a death benefit upon the accidental death of an insured or upon the loss of a limb due to an accident. AD&D is purposed to serve as a supplement to regular life insurance as coverage is limited to certain types of accidents. No benefit is payable if the death is due to natural causes or other excludable events. However, AD&D can be a cost-effective way to supplement insurance and provide additional financial assistance to families of the deceased.

Article Sources

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  1. Centers for Disease Control and Prevention. "Underlying Cause of Death, 1999-2019 Results."