Did you hear about an accidental death and dismemberment life insurance policy? Were you wondering if it is the right option for your needs? While this is a coverage that can be valuable, it may not always be easy to see how fitting it is to you. There is a difference between this policy and traditional term life insurance. Here’s a closer look at what that difference is.
What Is AD&D?
Accidental death and dismemberment (AD&D) is a form of life insurance. Most of the time, it is a rider on a larger policy. Sometimes, companies sell this separately from a full, term life policy. It can, in some limited cases, also be a part of a health insurance policy (generally as a benefit to buying that coverage). It has a payout amount that applies only when certain events occur.
Most often, this covers severe instances such as:
- The loss of a limb
- Unintentional or sudden death
- The loss of other body parts
- Loss of the function of those body parts
- Loss of speech, eyesight, and hearing
- Other disabling injuries
This type of coverage has limitations. For example, a traditional term life insurance may cover your death in nearly all situations from car accidents to illness. AD&D only applies in these cases. To know when it applies, read the schedule of details that the policy includes. In nearly all situations, it will list out the type of incident and the percentage of benefits received when those incidents occur.
What About Accidental Death?
Accidental death is not as all-encompassing as it sounds. Nearly all policies have numerous limitations on when this applies. Your AD&D policy should list them clearly. Many times, it will cover only deaths that occur in exceptional situations. This includes things like traffic accidents and drownings. It may also include certain homicides or falls. Learn when it applies.
Should You Buy AD&D?
There is no reason not to invest in it if it is available to you. However, most people need to continue to receive other coverage, as well. Buying this type of coverage alongside your term life or whole life insurance policy can offer you a higher level of protection. Remember, you don’t know what could happen to you in the future. Having proper life insurance that covers as many risks as possible can be beneficial.
Let your life insurance agent help you. Contact them to learn more about the opportunities available to you.