Term life insurance and accidental death and dismemberment (AD&D) insurance are two different types of coverage, and the biggest difference between them is what they cover. While term life insurance provides coverage for any cause of death, AD&D insurance provides coverage only if the death or injury is caused by an accident. Here’s a closer look at each type of policy:

Term life insurance

Term life insurance pays out a death benefit to your beneficiaries if you die within a specific time period, regardless of the cause of death, with some exceptions. Here’s a table that shows what is and isn’t covered by term life insurance:

Reason for claim	Term life	AD&D
Death due to illness or disease	Yes	No
Death from an accident, like a car crash	Yes	Yes
Death from drug overdose	Yes	No
Death from drunken driving (by the insured)	Yes	No
Death from suicide	Yes (if the policy has been in effect long enough, usually two years)	No
Loss of eyesight, hearing or a limb	No	Yes (depending on the injury, you may receive a partial payout)

Term life insurance policies have a specific term length, usually ranging from one to 30 years. If you die after the term ends, there is no payout because the policy has expired. However, you can purchase a new policy at the end of your term, but you can expect to pay higher rates because you’ll be older, and they may be even more expensive if you develop any medical conditions.

Accidental death and dismemberment insurance

Accidental death and dismemberment insurance can be purchased as a stand-alone product or as a rider on a life insurance policy. Unlike term life insurance, AD&D policies pay out only if you’re killed or injured in an accident. Here’s a closer look at AD&D insurance:

• AD&D policies pay out only for death or dismemberment caused by an accident
• AD&D policies often exclude deaths due to high-risk activities such as skydiving or car racing
• AD&D policies exclude deaths caused by a drug overdose, drunken or drug-impaired driving by the insured person, war, mental illness, suicide and certain other circumstances
• Payouts for partial injuries, such as losing your sight in one eye, are generally only a portion of the full benefit

While AD&D insurance can be a good supplement to life insurance, it may not be worth the money for everyone. If your goal is to provide your family with a financial safety net regardless of how you die, life insurance is the right purchase.

Life insurance and accidental death insurance are two different types of coverage, although they may have some similarities. Accidental death and dismemberment (AD&D) insurance is a type of life insurance that covers specific types of accidents that result in death or serious injuries such as the loss of a limb, paralysis, or blindness. AD&D coverage is available as a standalone policy or as a rider to an existing life policy. On the other hand, life insurance covers death from any cause, including accidents and natural causes.

What’s the Difference Between AD&D and Life Insurance?

The main difference between AD&D and life insurance is that AD&D only pays out if the insured dies or suffers a serious injury due to a covered accident, while life insurance pays out for death from any cause. However, some life insurance policies may offer an AD&D rider that provides additional benefits in case of accidental death or injury.

To help better understand the differences between AD&D and life insurance, here is a table that shows the key distinctions:

	Accidental Death and Dismemberment (AD&D)	Life Insurance
Coverage	Accidental death, dismemberment, and certain injuries	Death from any cause
Benefit	Lump-sum payment to the beneficiary	Lump-sum payment to the beneficiary
Cost	Less expensive than life insurance	More expensive than AD&D insurance
Availability	Available as a standalone policy or as a rider to a life policy	Available as a standalone policy or as a rider to an AD&D policy
Coverage Limitations	Covers only specific accidents and injuries	Covers death from any cause

Who Should Get AD&D Insurance?

AD&D insurance may be a good option for individuals who are at a higher risk of accidental death or serious injury due to their profession or lifestyle. However, it’s important to note that AD&D insurance may not cover all types of accidents or injuries, and it may not be available to everyone. For those who are concerned about accidental death or injury, adding an AD&D rider to a life insurance policy can provide additional protection.

If you’re considering AD&D insurance or a life insurance policy with an AD&D rider, it’s important to shop around and compare rates and coverage options to find the best policy for your needs and budget. Additionally, you may want to consult with a licensed insurance representative to help you understand your options and make an informed decision.

Convertible term assurance is a type of term policy that allows you to convert to a whole of life policy at the end of the policy term, without providing new medical information. It provides the flexibility to keep your life cover in place if your needs change in the future.

Key features of the conversion option:

Pros	Cons
Provides flexibility to convert to a whole of life policy	Premiums may increase
No need to provide new medical information	Not all policies come with the conversion option and those without added options may be cheaper

Most policies don’t come with the conversion option, including those arranged through Reassured. Policies without added options tend to be cheaper but are less flexible. If you’re looking for affordable life cover, Reassured can help you compare life insurance quotes from some of the UK’s largest providers, finding you the best deal they can offer.

Convertible term assurance works by giving you the flexibility to convert your term life policy to a whole of life policy at the end of its term. If you have the conversion option included in your policy, then you could convert the term-based policy to a whole of life policy just before it expires. Whole of life insurance provides cover until you pass away and a pay-out is guaranteed to your loved ones.

Term life insurance provides financial protection for your loved ones if you were to pass away unexpectedly during the term of the policy. It pays out a fixed cash lump sum in the event of your death. The cost of term life insurance is calculated based on your individual circumstances and the terms of the policy. An insurer takes into account factors such as your age, health, and lifestyle when determining your premium.

Convertible term and renewable term assurance are both options that can be added to a term life insurance policy. While the conversion option allows you to convert the existing policy to a different policy (whole of life), the renewable option allows you to extend the existing policy. With both options, you usually won’t need to provide any new medical information when the time comes to secure the new cover. Typically, you can’t have convertible term and renewable term options included under one policy.

Whole of life insurance is generally more expensive than term life insurance with the conversion option. Taking out a whole life policy initially while you’re still fairly young means paying a higher premium for a longer amount of time. If you’re young and healthy, then term life insurance with the conversion option can provide affordable protection while your family may need it the most, with the flexibility to convert to whole of life later on, which guarantees to pay out (perhaps providing loved ones with an inheritance).

Accidental death and dismemberment (AD&D) insurance is a type of life insurance that pays out benefits only if the insured person dies or suffers specific serious injuries due to a covered accident. It can be purchased as a standalone policy or added to a standard life policy as a rider.

Understanding AD&D Coverage

The accidents and injuries that AD&D coverage can pay out for will be specified in the policy. Accidents covered by AD&D insurance can include:

Accidents Covered by AD&D Insurance
Loss of limb
Paralysis
Blindness
Accidental dismemberment
Qualifying accidental injuries

It is important to note that AD&D policies do not typically cover death or injury caused by high-risk activities. However, it may be possible to add an AD&D rider to a standard life insurance policy to increase the benefit if the insured person dies from a covered accident.

AD&D vs. ADB Life Insurance Policies

Both AD&D and ADB life insurance policies only pay out in the case of accidents. The main difference between the two is that an ADB policy may only pay out for a fatal accident, while AD&D policies can also pay out for accidental dismemberment and certain accidental injuries.

Standalone AD&D Policies

Standalone AD&D policies are more typical for individuals who do not qualify for standard life insurance but want some level of coverage, and they are not available from all insurers.

Adding an AD&D Rider to a Standard Life Insurance Policy

If you already have life insurance and want coverage in case of accidental serious injury, it may make sense to add an AD&D rider onto your standard life insurance policy. This can be more affordable than purchasing a standalone AD&D policy.

Conclusion

Accidental term life insurance can be a good option for individuals who have concerns about covering the costs of a serious accidental injury. However, it is important to understand the limitations of AD&D coverage and to compare rates and coverage options to determine what is best for your needs and budget.