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Even though we cannot eliminate risk from our lives, you can take steps to protect yourself and your loved ones financially. Like life insurance, accidental death and dismemberment (AD&D) insurance is one safeguard against the unexpected. 

AD&D is usually added as a supplement to standard life insurance and does not replace life insurance. Still, AD&D policies are inexpensive, easy to understand, and can provide robust coverage when used alongside a life insurance plan. If you die accidentally, your beneficiary receives funds so their life isn’t disrupted financially. If you are incapacitated by an accident, like if you lose an arm, you can receive a payout from your policy. 

How accidental death and dismemberment insurance works

AD&D policies cover accidents. Most AD&D claims are for accidental death. Also, there are standard payouts when it comes to loss of limbs or other bodily functions, like sight. 

Essentially, if a covered accident occurs, you or your beneficiary will file a claim and receive a payout according to your policy. 

Policies will outline on whether they cover a specific body party. A big toe, for instance, might not go into a payment category because certain dismemberment policies often start at or above the ankle. 

Your policy may state that in order for you to receive benefits, your death or the loss of bodily function must occur within a certain time frame after the accident, usually within three months. Your death or dismemberment must be a direct result of the injuries you sustained in the accident. If you die and meet the criteria, the policy will pay the principal (i.e., the full) amount. Loss of limbs or eyesight are paid on a scheduled basis, meaning a portion of the principal amount.

What is accidental death?

A rider for accidental death insurance on your standard life insurance policy is often called a double indemnity rider. If you die due to an accident, your beneficiaries are paid out from both policies. The double moniker refers to the fact that payouts from accidental death insurance riders are commonly equal to payouts from your standard life insurance, so your beneficiaries receive twice the amount of money if your death is accidental. 

Understanding what counts as sudden, accidental types of demise is important here. Death from fallings, exposure to elements, homicide, drowning, and traffic crashes, for example, are all accidental. Your beneficiaries will not receive an AD&D if you die from a disease, even if the disease is sudden. This is why you need to have standard life insurance, which will pay out for more causes of death than an AD&D policy. 

Still, household accidents are a major cause of death in the United States, as are fatalities caused by automobile crashes. AD&D helps your beneficiaries stay afloat financially if you are struck by an unexpected tragedy. 

What is accidental dismemberment?

AD&D insurance also covers dismemberment along with accidental death. AD&D places different payout values on various dismemberment values. Your beneficiaries receive the full payout if you die accidentally, but if you are dismembered (or otherwise lose an essential bodily function like your sight) you receive a fraction of your principal according to your policy’s plan. If you lose multiple limbs or bodily functions, you might receive the full amount of your principal as a payout. 

What accidental death and dismemberment doesn’t cover

If a major accident occurs, the circumstances of the incident become extremely important to your coverage. Each insurer and policy will be different, so you will want to read all the fine print of your policy to know what sort of accidents are out of bounds. Don’t be afraid to shop around if you think more types of accidents should be covered, or if you are unhappy with the payout amounts. 

However, there are some common exclusions to most AD&D policies:

  • Death from natural causes like disease
  • Death during surgery
  • Suicide
  • Drug overdose
  • Wartime death or injury
  • Skydiving or other risky hobbies
  • Drunk driving
  • Injury or death while playing a sport if you’re a professional athlete
  • Injury or death while you are committing a crime

Advantages and disadvantages of accidental death and dismemberment insurance

When debating the pros and cons of AD&D insurance, the most important thing to remember is that you should never see it as a replacement for traditional life insurance. While accidents happen, standard life insurance protects you and your loved ones in a much more robust way. 


  • Usually doubles the amount of principal your beneficiaries receive if you die accidentally
  • Adds a layer of financial protection in case something sudden happens to you
  • AD&D insurance is relatively inexpensive and sometimes included for free with employer-provided life insurance policies


  • Policies do not cover death from disease, even if the disease comes on suddenly, and they often do not cover certain sudden events, like a terrorist attack
  • Not a replacement for standard life insurance because AD&D terms are far more limited
  • AD&D policy sponsored by employer may not continue if your employment ends


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Accidental death and dismemberment policy extras

AD&D policies don’t cover emotional trauma due to an accidental death or dismemberment, but some offer counseling or “spouse career adjustment.” In addition to counseling, some companies also provide legal and financial support services to beneficiaries.

It might seem a little counterintuitive, but sometimes insurers will pay out more if you try to live safely. For example, a beneficiary might receive an additional $10,000 because a policyholder wore a seat belt when they died in an automobile collision.

Who sells accidental death and dismemberment insurance?

You will generally purchase AD&D through your workplace benefits as part of group life or health plans. Employers will often connect the amount of coverage to your salary and you won’t need to fill out a medical history to apply — workplace-based coverage offers guaranteed acceptance.

You can also purchase AD&D from credit card offers, with the policy underwritten by major insurers. Some credit unions also offer AD&D insurance with minimal coverage for no cost.

Generally, insurers selling AD&D target anyone seeking inexpensive accident coverage. 

Younger people who are in high-risk jobs such as heavy construction might consider purchasing AD&D, although premiums for people in dangerous jobs are likely to be more expensive. Again, AD&D should not replace a life insurance policy.

How much does accidental death and dismemberment insurance cost?

Like other types of insurance, the cost of AD&D varies based on your specific situation. AD&D insurance premiums can cost as little as $60 per year. An employer may offer their employees coverage for free. These plan benefit amounts vary significantly and can be tailored to meet an employer’s needs — generally ranging from $20,000 to $500,000 for an individual. 

However, the lower the premium, the less money you’d likely get if you or your loved ones need to file a claim. 

It’s vital that AD&D is not the only insurance policy you get. Life and health insurance are a must. AD&D can help you, but don’t avoid the other types of coverage and go with AD&D on its own. 

Alternatives to accidental death and dismemberment

Life insurance is not an alternative to AD&D insurance; instead, you should look at AD&D as a supplement to your standard life insurance. A life insurance policy will cover much more than AD&D, including natural causes of death. Remember, even if you are suddenly killed by a heart attack, this is not considered an accident and will not be covered by AD&D. 

You should look at an AD&D rider as an extra layer of protection for your life insurance policy, not an alternative. 

Like life insurance, disability insurance is far more robust than AD&D insurance and you should have a disability insurance policy first before purchasing AD&D coverage. Disability insurance provides payouts if you are hurt and are unable to earn an income. AD&D insurance is much more limited. 

Thinking about all the disastrous accidents that could happen is not a very pleasant way to spend a few hours reading through insurance policy details, although it might give you some ideas if you are seeking out screenplay ideas. Regardless, buying an AD&D policy is a way to find some peace of mind in an unpredictable world.  

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Barry Eitel
Contributing Researcher


Barry Eitel is a content writer and journalist focused on insurance, small business and finance. He has researched and written about personal finance since 2012, with a special focus on entrepreneurship, freelancing and other small business operations. His writing on insurance and small business has been featured in 7x7, Brit + Co, Intuit Quickbooks, Bankrate, Policygenius and Lendio.