AD&D Insurance Benefits and Coverage
In USA
accidents are the fourth main leading cause of death for adults ages 25 to 44,
according to the Centers for Disease Control.
That’s why there is a necessity of accidental death and dismemberment (AD&D) insurance and the best life insurance options pays you the coverage.
What Is
Accidental Death and Dismemberment Insurance?
Accidental
death and dismemberment insurance provides coverage to the insurer for a death
due to an accident and generally this insurance also pays if you lose a limb or
hearing or speech a function such as sight, in an accident.
Whoever
you nominate as the beneficiary on your policy will receive a lump-sum
insurance payment if you die in an accident.
If you get injured in the accident, you will receive the insurance
benefits depending upon the injury.
For
example if the insurer loses a hand, foot or sight in one eye, he will get
50% as per AD&D insurance policy if
he loses two or more things he might get 50% to 100% of the insurance benefit
amount.
The
amount of insurance coverage will depend on limits set by insurers, insurance
company or by employers offering AD&D insurance as a workplace benefit. For
example, purchasing an AD&D policy from Farmers Insurance with a benefit
ranging from $37,500 to $200,000 for an accident can be covered by insurance
policy. Farmers Insurance pays around $1 million for “certain circumstances,”
such as losing life in a plane crash on a commercial flight.
What’s
Covered by AD&D Insurance?
The main
objective of the Accidental death and dismemberment insurance covers only deaths and injuries from any
accidents and not for the natural causes or illnesses or heart attacks or
strokes. This insurance policies only covers death or injuries from accidents
at work, home and while traveling.
In
addition, if the death is the due to the accident while traveling on public
transportation, including a bus, train or airplane, the payout can be double or
triple based on the amount of the insurance base coverage. To claim this the
death should not be immediate and usually needs to occur in a certain time
frame, such as within a few months and the insurance policy will outline the
rules.
Are There
Additional AD&D Insurance Benefits?
Yes, some
insurance companies will pay an additional benefit to the insurer if he was
wearing the seat belt during an accident which led to an injury or death. Depending upon the option of the insurer
additional benefits may also be given to help children pay for higher education
and for financial advising services to surviving spouse.
What’s
Not Covered by AD&D Insurance?
Insurance
policies have a long list of situations when death or injury won’t be covered
for the AD&D insurance. Those exclusions policy changes from company to
company, state where the policy is issued. Benefits are generally not payable
for:
• Injury that happened prior to coverage
• Death caused by illnesses, including
mental illness
• Suicide or self-inflicted injuries
• Drug overdose
• Death or injury happened while driving
under the influence of alcohol
• Death or injury happened from
voluntarily inhaling gas or taking poison
• Death or injury while committing a
crime
• Death or injury happened while
participating in a riot or suffered during a war
• Injuries while serving in the armed
services
• Death or injury happened from car
racing, flying a plane, playing professional sports or participating in some
tough sports such as sky diving and scuba diving
How Can
You Get AD&D Insurance?
In many
companies, employer offers AD&D insurance as part of its benefits package
and some employer group plans also allows the employees to insure their spouse
and children.
Few best
insurance companies like Farmers Insurance, AIG Direct, and Mutual of Omaha,
sell individual AD&D insurance policies. It is better to look for insurance
quotes online or with an insurance agent or directly approach the insurance
companies for quotes and compare the
policies to find the best and cheapest or affordable insurance policy for your
needs.
Accidental
death coverage can be purchased as a life insurance rider, or add-on to any
life insurance policies. There is a chance of doubling the insurance coverage
and can get paid if died in an accident.
Cost of
AD&D Insurance
The
purchasing price for Accidental death and dismemberment insurance is lower than rates for traditional
life insurance because the insurance coverage is only for accidents. Employers
offering AD&D insurance, might be able to get a basic amount as a free
benefit.
AD&D
insurance costs are fixed to the amount of coverage the insurer purchases. For
example, monthly premiums might start at $4.60 for every $100,000 in accidental
death coverage from Farmers Insurance. Rates start at about $8.1 month for
$100,000 of coverage from Fabric Insurance. The rates changes from insurer to
insurer, it can pay and it is best to shop around for the best rate.
Pros and
Cons of AD&D Insurance
Some
people mistakenly think that buying AD&D insurance is a financial safety
but it is not like that, this insurance is for only for accident coverage and
not if someone dies unexpectedly.
According to Voegele, agency vice president of Country Financial “It
gives them a false sense of security,” Because AD&D provides only limited
coverage that too only for accidents and it isn’t right for everyone.
Pros
No need
for a medical exam to get AD&D insurance. Not to give details about your
health, so this type of policy appeals to people with pre-existing conditions
to find affordable life insurance.
Won’t be
denied coverage because of your health. Age must be between ages 18 and 70 or
80 depending upon the insurance company.
You can
get insurance policy quickly. After buying the policy through online or an
insurance agent, you will get the policy gets immediately.
Cons
Coverage
is limited. AD&D insurance will be paid only if the death or injury was a
result of an accident and this limited coverage is a big drawback.
You might
lose your insurance coverage if you leave your job. Most people who got
AD&D insurance through a group plan at work, can’t keep that coverage after
leaving job.
Who
Should Get AD&D Insurance?
As this
insurance pays out only in the event of an accident, AD&D insurance isn’t
ideal for everyone. When offered as a free workplace benefit take it.
Consider
the value getting for a workplace policy have to paid, check whether the
coverage you’d get would be worth the cost.
Alternatives
to AD&D Insurance
The best
is the term life insurance policy which is usually better coverage than Accidental death and dismemberment insurance as it provides a payout for any cause of death (except any
suicide, generally within the first two years of having the policy). So
accidents, heart attacks, strokes and more are all covered in this traditional
term life policy which makes a better insurance for the family.
In case
young and healthy people might be able to get a term life policy at a rate
which must be much higher than what has to be paid for AD&D insurance.
Its
better signing for disability insurance through your employer or getting a
insurance policy on your own in case you’re unable to work. Disability
insurance will help replace lost wages for the insurer when cannot go to work
due to illness or an injury.
AD&D
Insurance Frequently Asked Questions (FAQs)
Do I need
both life insurance and AD&D insurance?
When have
adequate life insurance then don’t need AD&D insurance. Life insurance such
as term life insurance might provide your family or beneficiary with funds to
pay expenses if anything happens unexpectedly.
AD&D
can supplement life insurance as it pays out incase losing a limb or eyesight,
or other non-death injuries covered by the policy. And it pays out as life
insurance incase of death from an accident.
But
AD&D insurance is not to be considered as replacement for life insurance
because it has much more narrow in the types of death covered.
How is
AD&D different from life insurance?
AD&D
includes life insurance, but the insurance coverage is only for accidental
death. It’s different from life insurance because it pays for severe non-fatal
injuries such as loss of a limb or paralysis.
Regular
life insurance, such as term life insurance, won’t cover injuries that aren’t
fatal.
Does
AD&D insurance cover natural death?
Accidental death and dismemberment insurance will not pay out for someone who dies from natural cause of death or
illness. AD&D’s life insurance component is particularly for accidental
deaths. AD&D insurance won’t pay out anything for the death off sickness,
cancer, heart disease or simply old age.
What are
examples of accidental death?
Some
examples of accidental death are: plane crash, accidental fall, car accident,
drowning and dying in a fire.
It’s
important to know which one qualifies as an “accidental” death if you have
AD&D insurance as per the insurance policy from the insurance company
because each insurance company has different parameters. It’s better to know
the limits of what the policy will pay for.