Accidental Death & Dismemberment (AD&D) insurance is a limited form of “life” insurance that will pay full policy benefits if the insured dies in an accident and lesser amounts for the loss of sight, hearing, or a limb. AD&D is much cheaper than traditional life insurance, but it is only an add-on to whole or term life, not a replacement for them.
No one likes to think about their own death or dismemberment, but since these unfortunate accidents do happen, it is best to plan ahead and ensure your loved ones are financially protected if the worst happens. To ensure financial stability in the event of accidental death, many people choose to purchase accidental death and dismemberment insurance governed by ERISA.
As its name suggests, this type of policy provides financial benefits to a beneficiary if a policyholder is killed or dismembered in an accident and, if it is provided through your employer, likely reinforced by the Employee Retirement Income Security Act of 1974 (ERISA). Despite the allure of such policies, many individuals find they are unable to obtain the benefits they are entitled to. If this has happened to you or your family, it may be in your or their best interest to contact an accidental death and dismemberment insurance lawyer. A compassionate ERISA attorney could advocate for you or your loved ones.
Accidental death and dismemberment (AD&D) insurance policies provide policyholders and their beneficiaries with a lump sum of money in the event the policyholder dies of an accident or loses their hearing, vision, or limbs. These types of insurance policies are usually purchased in addition to regular life insurance, and they are relatively low-cost when compared to other types of insurance.
Unlike regular life insurance, which provides coverage for all types of deaths, AD&D only provides coverage for certain types of death. AD&D insurance sometimes allows for a scenario known as “double indemnity,” meaning it often pays out up to twice or sometimes three times the amount of a normal life insurance policy.
Life insurance is a contract between an insurance company and an insured that says in return for the payment of premiums, the insurance company will pay benefits to a designated beneficiary upon the insured’s death. The policy can be whole or cash-value where the premiums build a cash-value or term insurance without cash value.
The latter is much cheaper because all of the premiums go to the insurance cost. Still, the cash value policy may provide greater benefit over the long run by allowing you to access the cash value in various ways.
In either case, the deal is the policy owner pays premiums and, upon the insured’s death from almost any cause, the insurance company pays the required benefits. Death by suicide close to the purchase date of the policy or by acts of war is generally excluded from benefits, as are some high-risk activities. But, in general, no matter how you die, standard life insurance pays the beneficiary.
If a truck T-bones you at an intersection, the AD&D policy should pay; if you have a massive heart attack, it may not. AD&D, in other words, pays only in the event of accidental death or loss. Since insurance companies are profit-making institutions seeking to take in more premium dollars than they pay out in benefit dollars, they prefer to deny your claim if they can. They will seek to find an intervening non-accident clause or at least try to argue that your injury did not result from an accident.
As limited insurance policies, AD&D policies often exclude several conditions or actions from coverage under the policy. They often word these exclusions in a manner that gives them a lot of room to interpret the meaning “to deny coverage.”
Some of these exclusions are:
The wording of the exclusions may favor the insurance company, but don’t trust the insurance company’s word if it claims the policy excludes you. You will want an experienced AD&D lawyer who can verify whether those exclusions apply to you and fight for the benefits you deserve if they do not.
Insurance companies even those overseeing plans governed by ERISA may attempt to avoid paying by alleging the policyholder was killed in one of the following ways, any of which would preclude payment on an AD&D policy:
Some insurance companies may also attempt to prove there is too long of a lapse between the time of accident or death and the date the claim was filed. Dealing with insurance companies can be frustrating, but it is possible to fight back against their deceptive practices.
The ERISA insurance claims process can be very confusing, especially for individuals who have never had to deal with a major insurance company before. Often, insurance claims are denied due to a lack of information or missing facts. Important documents can be misplaced or filled out incorrectly, and a single mistake can result in a denial from an insurer.
When a claim is denied due to insufficient information or errors, an ERISA accidental death and dismemberment insurance lawyer may be able to claim incontestability, especially if the insurer continued to collect premiums even after the erroneous information was submitted and processed. This is also a common practice employed by insurers.
A. No. Term life insurance is a life insurance policy that covers any cause of death (except for a few limited exclusions like suicide close to the purchase or acts of war). It does not build cash value like whole life insurance, but if the insured dies, the policy should, in good faith, pay the designated beneficiary. On an AD&D policy, the death or dismemberment must result from an accident and not from any other cause. Most insurance companies seeking to deny a claim will begin at the “cause of death was not an accident” point.
A.: Once the insurance adjuster has investigated and approved the claim, the insurance will make a lump-sum payment of the benefit amount due. Whether it is tax-free or not depends on whether you bought your policy or obtained it through your employer.
A.: No. An AD&D policy covers only accidental deaths or dismemberment. The insurance company will deny any claim based on any injury caused by something other than an accident.
A.: An AD&D policy provides coverage for accidental death or dismemberment. Your policy will define the conditions that constitute dismemberment and what benefits you will receive from them. Typical provisions, assuming a $10,000 policy, are:
Loss of life: $10,000
Loss of one arm at or above elbow: $7,500
Loss of one leg at or above knee: $7,500
Loss of one hand or one foot: $5,000
Loss of thumb and index finger one hand: $2,500
Loss of sight in one eye: $5,000
Loss of hearing in both ears for six months or more: $5,000
Loss of speech for at least six months or more: $10,000
Paralysis of one arm or leg: $2,500
Brain damage for at least 12 months: $10,000
More than one of the above from the same
Accident: Lesser of $10,000 or sum of benefits payable for each loss:
No medical examination is needed to get the policy. You don’t have to answer health questions, so if you have pre-existing conditions, this is one way to have some coverage that might not be otherwise available.
You won’t get a health-based denial of coverage. You only have to meet the policy’s age range, which is usually between 18 and 70, 80, or 90.
Coverage is usually available quickly, sometimes even immediately with an online purchase.
AD&D can be useful for younger people who are far more likely to die of an accident than an illness.
The coverage is limited; it only pays in the event of an accident.
The policy may seem cheap, but the limited coverage means that you’re not getting much for your money. You could probably get a cheap policy to pay benefits when a dinosaur eats you, but you could invest your money more wisely.
Although many advisors will tell you the policies aren’t worth the money, the benefits can help after the unexpected death of the family’s breadwinner.
If your policy comes through your employer, you may lose it if you change jobs.
If your insurance company is denying your claim or delaying negotiations on your claim, let J. Price McNamara ERISA Insurance Claim Attorney help you move them along. Contact us or call (713) 300-0462 for a no-cost initial consultation on your AD&D denial case.
Following graduation from Loyola Law School in New Orleans in 1990, Price McNamara served as a Federal Judicial Law Clerk to the Honorable John M Shaw, Chief Judge, United States District Court Western District of Louisiana.
Mr. McNamara founded the Law Offices of J. Price McNamara, and began putting his past experience to work for the injured and disabled clients he now represents against the insurance companies in personal injury and long term disability and other insurance disputes in both federal and state courts