Life insurance companies offer a variety of riders or simply policy add-ons to customize your insurance coverage. Some riders come at no additional cost and are built into the policy, while others have an additional cost.

AD&D

Accidental Death and Dismemberment is also known as AD&D. It provides an extra death benefit amount, oftentimes double, if death occurs because of an accidental injury or if you lose a limb in an accident. For example, if you have a $1,000,000 life insurance policy and were to die because of an accident, your policy could pay out $2,000,000.

Dismemberment

If you are in an accident and lose a limb (leg, foot, arm, hand, fingers), or lose your eyesight or hearing, the dismemberment coverage of an AD&D policy rider will pay out the additional benefit while you’re still alive. The dismemberment coverage can be very specific when it comes to meeting the policy’s definition of a qualifying event and it may differ between carriers. For example, some policies state that if you don’t die because of the accident and instead lose a limb, you will only receive 50% of the benefit payout, while losing two or more limbs would result in a full benefit payment.

To collect on an AD&D policy, it must be proven that death or injury was directly caused by the accident or occurred within a certain time frame after the accident, usually three months. If you were to die after the specified time frame established in your policy, you would not receive the additional benefit. Exclusions and limitations will vary by insurance company.

Are all accidents covered?

AD&D policies often exclude deaths due to high-risk activities such as skydiving or car racing. Deaths caused by criminal activity, drug overdose, drunken or drug-impaired driving by the insured person, war, complications from surgery, mental illness, and suicide are also typically excluded.

How can you buy AD&D life insurance?

AD&D can be added as a rider on a life insurance policy or as a stand-alone insurance policy. If you’re considering it, we recommend you add it to a life policy rather than have a stand-alone policy. It’s also sometimes offered by credit card companies, lenders, and credit unions.

The Bottom Line

The AD&D rider pays out an extra benefit if you die from an accident or lose a limb in an accident. Talk to your independent life insurance agent to find out details and if it’s right for you.