Accidents happen, and sometimes, individuals choose to protect their loved ones in the event that they should pass away or be maimed as the result of one. For these individuals, accidental death life insurance can be a good choice.
What is accidental death life insurance?
Accidental death life insurance, also known as accidental death & dismemberment insurance or AD&D, is supplemental insurance often added or purchased along with a more traditional term or whole life insurance policy.
This policy only provides benefits in specific instances, including the following:
- Accidental death
- Loss of limbs, hearing, or eyesight
- Loss of use of limbs due to paralysis
When an AD&D policy is purchased as a rider or supplement to another life insurance policy, its benefits are added to that policy’s benefits in the case of accidental death.
For example, a $100,000 life insurance policy with a $50,000 AD&D rider would pay $100,000 if you died of an illness but $150,000 if you died in a traffic accident.
What are the downsides to accidental death life insurance?
The primary downside to accidental death life insurance is the limited nature of the policy. Your loved ones only receive the death benefit if you die under specific circumstances, such as a fall or a traffic accident. The limited nature of AD&D insurance is one reason that most people purchase it as a rider to a more comprehensive life insurance policy.
Why consider accidental death life insurance?
Accidental death life insurance can provide additional useful benefits to your loved ones if you die or are maimed accidentally. For example, the added death benefit can help to pay for medical expenses incurred before your death or help to absorb the financial impact of losing you unexpectedly. It makes a good choice for anyone who wants to ensure that their loved ones have nothing to worry about if an unthinkable accident should occur.