Accidental death insurance, often known as accidental death and dismemberment (AD&D) insurance, is a kind of life insurance that complements standard coverage. It pays benefits if the policyholder dies or is seriously injured in an accident. Unfortunately, insurance companies don't always payout when someone dies in an accident. In this article we will review what is considered an accidental death (with examples) and provide steps you can take to ensure you and your loved ones are taken care of financially if the unthinkable happened or happens.
What is Considered Accident Death?
What Is Covered By AD&D Insurance?According to the Centers for Disease Control and Prevention (CDC), accidents are the third leading cause of death in the U.S. When people die due to accidents, one source of insurance that can be turned to in order to provide compensation for dependent family members is AD&D insurance. Read on for more information about this type of insurance and accidental death examples that are commonly covered by it.
What Is AD&D Insurance?Accidental death and dismemberment insurance is generally found as a rider on a person’s health or life insurance policy. The “dismemberment” portion of the name refers to any loss of — or loss of use of — a body part or function, such as the loss of a limb, or the loss of speech, eyesight, or hearing. The “death” portion of the name refers to a death that was caused by an accident. The coverage received by this supplemental insurance plan depends on the circumstances of the death or dismemberment. Dismemberment often allows for around 50 percent of the policy limit for the loss of one thing, such as a hand or eyesight. However, this coverage increases if there is a loss of two or more body parts or functions. Rarely are less than at least two losses of body parts or functions afforded the full policy limit. The term “accidental death” refers to a death that was neither intended, expected, or foreseeable. Often, the death benefits provided in this supplemental policy are provided in addition to life insurance, are subject to caps, and are paid to beneficiaries in one lump-sum payment. AD&D insurance will not provide any coverage for deaths that occurred due to natural causes, illnesses, or suicide. There are many more exclusions to this type of insurance, which are included below. AD& insurance is most commonly obtained through a work benefits package as part of a life insurance policy. However, AD&D can also be obtained as a stand-alone policy through some insurance companies and the cost tends to be lower than that of traditional life insurance policies as the coverage is only extended to deaths and injuries that are caused by accidents.
Types of Deaths or Injuries Not Covered by AD&D InsuranceAs previously mentioned, AD&D policies generally have a number of exclusions, so it is important that you read your policy carefully and ensure that you understand what is covered and what isn’t. Some examples of common exclusions include:
- Deaths resulting from natural causes, illness, or suicide
- A death or injury resulting from driving under the influence of alcohol
- Deaths occurring as a result of a drug overdose involving illegal drugs or drugs used other than as prescribed
- Deaths or injuries suffered as a result of armed service or during a war.
- Injuries or death suffered as the result of a riot
- Deaths or injuries resulting from car racing or other extreme sports such as sky-diving or scuba-diving
- Deaths occurring after a non-disclosure or a false statement was made on the insurance application