What Does Accidental Death and Dismemberment Cover?

Accidental Death and Dismemberment (AD&D) insurance provides financial protection in the event of an accidental death or specific accidental injuries. This type of coverage focuses narrowly on incidents caused by accidents, rather than covering all causes of death or illness.

Covered Accidental Events

AD&D insurance specifically covers death that is directly caused by an accident. This means the event must be external, violent, and unforeseen to trigger a payout. Common examples of accidental causes of death that are typically covered include motor vehicle accidents, falls, drowning incidents, and fatalities resulting from fires. Coverage also extends to other sudden, unexpected events like accidental poisoning or electrocution. For instance, if a heart attack leads to a car crash, the death would generally not be considered accidental for AD&D purposes.

Specific Losses Covered

Beyond accidental death, AD&D insurance also provides benefits for specific, non-fatal injuries, commonly referred to as “dismemberment.” These injuries must result from a covered accident. Covered losses frequently include the complete severance of a limb, such as a hand or foot, often at or above the wrist or ankle.

Policies also extend coverage to the permanent and irrecoverable loss of essential bodily functions. This often includes the loss of sight in one or both eyes, loss of hearing in one or both ears, or the complete loss of speech. The compensation for these specific losses is typically a percentage of the policy’s principal sum, with the exact percentage varying based on the severity and type of loss, as detailed in the policy’s schedule of benefits. For example, losing one limb might result in a 50% payout, while losing two limbs or sight in both eyes could trigger a 100% payout.

What Is Not Covered

AD&D policies contain specific exclusions, meaning certain circumstances will prevent a payout even if an injury or death occurs. Illness or disease, including conditions like heart attacks, strokes, or bacterial infections, are generally not covered. Deaths or injuries from natural causes also fall under these exclusions. Policies typically exclude self-inflicted injuries or suicide.

Injuries sustained while committing a felony or other criminal acts are also commonly excluded. Exclusions often apply to events like war or acts of war, injuries incurred while under the influence of alcohol or non-prescription drugs, or participation in certain high-risk activities such as professional athletic events.

How Benefits Are Paid

When an accidental death occurs, the full “principal sum” of the AD&D policy is paid to the designated beneficiary or beneficiaries. The principal sum represents the policy’s face value and is the maximum amount paid for accidental death. For dismemberment or other specified accidental losses, a “capital sum,” which is a percentage of the principal sum, is paid directly to the policyholder.

Initiating a claim typically involves notifying the insurer as soon as possible after the accident. Required documentation, such as death certificates, police reports, and medical records, must be submitted to verify the accidental nature of the event. AD&D coverage is frequently offered as a rider, an add-on, to a standard life insurance policy, or as part of an employer’s group benefits package. Beneficiary designation is a crucial step to ensure benefits are paid according to the policyholder’s wishes.