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  • Writer's pictureDoron Yaniv

Accidental Death & Dismemberment or A Life Insurance Policy. Which Policy Is Right for You?

Updated: Apr 21, 2023

Accidental Death & Dismemberment (AD&D) and Life Insurance policies are two different types of insurance policies that provide financial protection to individuals and their families. While both policies offer financial support in the event of an unexpected death, there are some key differences between the two.

What is Accidental Death and Dismemberment Insurance?

An Accidental Death & Dismemberment (AD&D) is an insurance policy that provides a lump sum payment to the beneficiary in the event of the policyholder's accidental death. This policy is designed to provide financial support to the policyholder's family in the event of an unexpected death due to an accident. AD&D policies typically have lower premiums than traditional life insurance policies, as they only cover accidental deaths.

What Does Accidental Death & Dismemberment Insurance Cover

Accidental death and dismemberment insurance plans cover accidental death from:

Car crashes

Airplane crashes

Other vehicle accidents

Firearm accidents

Workplace accidents

Fire-related accidents

AD&D insurance often also covers the following if they result from an accident listed above:

Loss of limbs

Loss of eyesight

Permanent paralysis

An Accidental Death and Dismemberment (AD&D) policy typically covers accidental death, dismemberment, loss of sight, speech, or hearing resulting from an accident. However, there are certain situations that an AD&D policy may not cover, such as death or injury resulting from: 1. Illness or disease: AD&D policies only cover accidental death or dismemberment, not death or injury resulting from an illness or disease. 2. Suicide or self-inflicted injury: AD&D policies typically exclude coverage for death or injury resulting from suicide or self-inflicted injury. 3. Intentional acts: AD&D policies may not cover death or injury resulting from intentional acts, such as criminal activity or participation in a dangerous activity. 4. War or military service: AD&D policies may exclude coverage for death or injury resulting from war or military service. 5. Drug or alcohol use: AD&D policies may not cover death or injury from drug or alcohol use. It's important to carefully review the terms and conditions of an AD&D policy to understand what is covered and what is excluded. You should speak with your insurance provider or agent for any questions or concerns about your coverage.

What is a Life Insurance Policy?

Life insurance is a type of insurance policy that provides financial protection to the policyholder's family or beneficiaries in the event of their death. The policyholder pays a premium to the insurance company, and in exchange, the insurance company agrees to pay a lump sum of money to the policyholder's beneficiaries upon their death. Life insurance provides financial support to the policyholder's family or beneficiaries in the event of their unexpected death, helping to cover expenses such as funeral costs, outstanding debts, and living expenses. Life insurance policies can be structured in different ways, such as term life insurance, whole life insurance, or universal life insurance. They can be customized to meet the specific needs and budget of the policyholder. Something else to consider is that life insurance policies typically have higher premiums than AD&D policies, as they cover a more comprehensive range of causes of death.

What Does a Life Insurance Policy Cover?

A Term Life insurance policy covers your death for essentially any cause. This contrasts with accidental death insurance, which only covers death from a covered accident.

What Life Insurance does not cover?

Not much. The main thing is, to be honest during your application. If you are found to have lied during that process — by hiding an illness, for example, or a smoking habit — you will risk non-payment of the death benefit.

There is also a period, typically two years, called the contestability period.

If you die during that time, the insurer might review your death to ensure it didn't stem from something you hid during your application. Committing suicide during the contestability period might also result in the non-payment of your death benefit. (If you have suicidal thoughts, dial 988 or visit to get help.)

Things to Consider When Buying Either Policy

Remember that the payout structure is another critical difference between AD&D and Life Insurance policies. AD&D policies typically provide a lump sum payment to the beneficiary. In contrast, Life Insurance policies can be structured to provide regular payments over a set period of time or as a lump sum payment. It's important to note that AD&D policies are not a substitute for life insurance policies. While AD&D policies can provide financial support in the event of accidental death, they do not cover other causes of death. Life Insurance policies offer more comprehensive coverage and can help ensure that your family is financially protected in the event of your unexpected death.

Finding the Right Life Insurance Policy for Your Specific Needs

In summary, selecting the appropriate life insurance policy need not be complex. Completing an application can enable you to apply for coverage and get approved quickly. Protect your family today without delay!


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