Is Accidental Death Insurance Worth It?

Accidental death and dismemberment (AD&D) insurance provides coverage for a death due to an accident, and generally also pays if you lose a limb or a function such as sight, hearing, or speech in an accident. The beneficiaries you name on your policy will receive a lump-sum payment if you die in an accident. However, this insurance type has some limitations, and it is essential to understand what it covers and if you need it.

What AD&D Insurance Covers

AD&D insurance covers deaths and injuries from accidents, including those that occur at work, home, and while traveling. However, it does not cover natural causes or illnesses such as heart attacks or strokes. The policy will outline the rules regarding the time frame for a death from an accident to occur and when the payout will double or triple if the death is a result of an accident while traveling on public transportation.

AD&D insurance will not pay out for someone who dies from cancer, heart disease, or old age. It is essential to know what qualifies as an “accidental” death if you have AD&D insurance to understand the limits of what the policy will pay for.

Cost and Coverage Amounts

The cost for AD&D insurance tends to be lower than rates for traditional life insurance because the coverage is limited to accidents. Monthly premiums might start at $4.50 for every $100,000 in accidental death coverage from Farmers. The amount of coverage you can get will depend on limits set by insurers or employers that offer AD&D insurance as a workplace benefit.

When AD&D Insurance Is Worth It

AD&D insurance is not ideal for everyone because it only pays out in the event of an accident. A term life insurance policy is usually better coverage than AD&D insurance because it provides a payout for any cause of death. However, AD&D insurance can supplement life insurance because it will pay out if you lose a limb or eyesight, or other non-death injuries covered by the policy. It is worth considering if it is offered for free as a workplace benefit.

AD&D insurance is also an option for those who can’t get traditional life insurance due to pre-existing conditions that make it difficult to find affordable life insurance. You don’t have to take a medical exam or answer questions about your health to get AD&D insurance.

Conclusion

AD&D insurance provides limited coverage, and it isn’t right for everyone. It is essential to understand what it covers and if you need it. A term life insurance policy is usually better coverage than AD&D insurance because it covers all causes of death. However, AD&D insurance can supplement life insurance and is worth considering if it is offered for free as a workplace benefit or if you can’t get traditional life insurance.