Back to all terms

Accidental Death and Dismemberment Insurance (AD&D)

Accidental Death and Dismemberment Insurance (AD&D) provides a tax-free lump-sum payment if you die or suffer a severe injury as the direct result of an accident. It is designed to offer financial protection for you and your family in the event of an unexpected, accidental injury or loss that causes death, dismemberment, or permanent disability.

This type of insurance pays different benefit amounts depending on the nature and severity of the loss. For example, full payment is made in the case of accidental death, while partial benefits apply for the loss of a limb, sight, hearing, or paralysis. AD&D is often included as part of group benefit plans or offered as an optional rider on life or health insurance policies. Coverage is valid only when the injury or death occurs due to an external, sudden, and accidental cause, and within a specific time frame following the incident, typically 12 months.

Example:

If a policyholder with $100,000 in AD&D coverage dies as the result of a covered accident, the beneficiary receives the full $100,000 benefit. If the policyholder loses one leg in an accident, the plan might pay 50 percent of the total benefit ($50,000).

What to Watch For:

AD&D coverage does not pay for deaths or injuries caused by illness, medical conditions, suicide, or risky activities like professional sports or intoxication. Review the schedule of losses in your policy to understand how different injuries are compensated. Keep your beneficiary information up to date to ensure prompt payment if a claim arises.

Related Terms

Accident

An accident is an unexpected, sudden, and external event that causes bodily injury, occurring independently of any illness or pre-existing condition. In the context of health and dental insurance, an accident typically refers to physical harm resulting from an unforeseen incident such as a fall, collision, or blow to the body. Accidents are distinct from sickness or degenerative conditions because they are caused by an identifiable event rather than a gradual process.

Accidental Dental

Accidental dental coverage pays for the repair or replacement of natural teeth damaged due to an accidental blow to the mouth or jaw. This benefit is distinct from routine dental coverage because it applies to emergencies caused by external physical impact, not decay or normal wear.

Actuary

An actuary is a professional who specializes in analyzing financial risk and uncertainty, particularly in the fields of insurance, pensions, and investments. Actuaries use mathematics, statistics, and financial theory to calculate premiums, reserves, and probabilities of future events such as illness, disability, or death. Their work ensures that insurance plans remain financially stable and that companies can meet future claim obligations while staying competitively priced.

Advisor/Agent

An advisor or agent is a licensed professional who helps individuals and businesses understand, choose, and manage insurance and financial products. In the context of health, dental, life, and disability insurance, an advisor’s role is to assess a client’s needs, explain plan options, and recommend solutions that provide appropriate protection within their budget.

Age Limit (Travel)

The Age Limit (Travel) refers to the maximum age at which a person is eligible for emergency medical travel insurance coverage or specific benefits under a health or dental plan. Insurers impose age limits to manage risk, as medical expenses tend to rise significantly with age and the likelihood of pre-existing conditions increases.

Have questions about your insurance coverage?

Our licensed advisors can help you understand your options and find the right plan for your needs.

Contact Us