At first glance, it may seem like life insurance and AD&D (accidental death and dismemberment) insurance are mostly the same, but this isn’t the case. Typically, beneficiaries receive life insurance benefits no matter what the policyholder’s cause of death is. There may be some exceptions, but these are usually clearly stated within the terms of the policy. On the other hand, AD&D insurance is designed to pay benefits for accidental deaths and dismemberments only.
Another important difference is that life insurance (whether term life or whole life) is an independent, standalone policy. AD&D insurance, on the other hand, can be offered as either a standalone policy or as a rider to a life insurance policy.1 Read on to learn more about the differences between life insurance and AD&D insurance.
Life insurance is a contract between an insurer and a policyholder that gives your beneficiaries access to a sum of money if you die while the policy is in force. While people may get life insurance for a variety of reasons, it’s typically to ensure that their family or dependents are financially secure after they pass.
The policy’s exact terms may differ based on the life insurance company and plan type you choose. For example, term life insurance offers coverage for a fixed period, usually 10 to 30 years. Meanwhile, whole life insurance offers lifelong coverage with a guaranteed death benefit.2
At the time of purchasing a policy, you can name at least one beneficiary. If you keep up with premiums and pass away while the policy is in force, your beneficiaries can file an insurance claim and receive the death benefit payout.
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Accidental death and dismemberment insurance pays out a death benefit if the insured party has passed away in an accident or experienced a serious injury. AD&D insurance can be a standalone policy or a rider.
AD&D policies have a few restrictions worth considering. For instance, they may not cover injuries or deaths associated with extreme sports. Refer to the policy for a complete list of limitations and exclusions.
The benefit of AD&D insurance is that it can provide a financial payout for people who suffer serious accidents. In these cases, life insurance may not provide any benefit.
Not certain which policy is right for you? These key differences between AD&D insurance and life insurance may help you better understand which policy is best suited to your needs:
Accidental death and dismemberment coverage is usually the more cost effective choice, although your premium depends on a number of factors. That said, term life insurance can be an economical choice for most young people, while other types of life insurance, such as a whole life policy, may be more costly.
Term life insurance usually lasts 10 to 30 years, while permanent life insurance provides coverage until you pass away as long as premiums are paid. AD&D insurance falls within the first category – you pay for coverage for a fixed period of time and can continue to renew the policy once the term ends.3
It’s important to understand that coverage varies significantly for AD&D insurance policies. Each insurer will have a list of covered accidents and exclusions that may not be covered. In instances of injury or dismemberment, you may only be eligible for part of the payout. With life insurance, a death benefit is guaranteed in all but a few specific scenarios.
Some life insurance companies allow you to add accidental death and dismemberment coverage to your traditional life insurance policy through a rider. This rider increases the death benefit if you pass away in an accident that is covered by the rider. You may also be eligible for a portion of the payout if you experience a covered injury. If the policyholder dies in an accident, the beneficiary may receive payouts from both the main life insurance policy and the rider. This is called double indemnity.4
By getting both life insurance and AD&D insurance, you can increase the payout loved ones receive in the event of accidental death. Aflac allows you to supplement your life insurance coverage with an accidental-death benefit rider.
Aflac offers term and whole life insurance with an accidental-death benefit rider, which offers the double indemnity benefit that many policyholders are seeking. This rider pays out a lump sum benefit in the event of an accidental death that occurs as a result of an injury sustained in a covered accident. Many people may consider accidental death coverage a must, especially those who drive often or use public transportation. If this sounds like you, consider chatting with an agent and getting a quote today.
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1 Forbes - AD&D Vs. Life Insurance: What To Know. Updated: Mar 6, 2023. https://www.forbes.com/advisor/life-insurance/life-insurance-vs-accidental-death-and-dismemberment/ Accessed March 28, 2023.
2 Investopedia - Life Insurance: What It Is, How It Works, and How To Buy a Policy. Updated December 22, 2022. https://www.investopedia.com/terms/l/lifeinsurance.asp. Accessed March 28, 2023.
3 Bankrate - Accidental death & dismemberment (AD&D) insurance. Updated September 02, 2022. https://www.bankrate.com/insurance/life-insurance/accidental-death-and-dismemberment/#what-is-accidental-death-dismemberment-insurance. Accessed March 28, 2023.
4 Investopedia - Accidental Death and Dismemberment (AD&D) Insurance. Updated May 26, 2022. https://www.investopedia.com/terms/a/accidental-death-dismemberment-insurance.asp. Accessed March 28, 2023.
In Arkansas, Idaho, Oklahoma, Oregon, Pennsylvania, Texas, & Virginia, Policies: ICC1368100, ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68100-A68400. In New York, NY68100-NY68400.
Coverage may not be available in all states. Benefits/premium rates may vary based on state and plan levels. Optional riders may be available at an additional cost. Policies and riders may also contain a waiting period. Refer to the exact policy and rider forms for benefit details, definitions, limitations and exclusions. For complete details, including availability and costs, please contact your local Aflac agent.
The content herein is provided for general informational purposes and is not provided as tax, legal, health or financial advice for any person or for any specific situation. Employers, employees and other individuals should contact their own advisers about their situations.
Aflac insurance coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, coverage underwritten by American Family Life Assurance Company of New York.
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