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Accidental Death and Dismemberment (AD&D) vs. Life Insurance: Here’s How They’re Different

Life Insurance Riders: What They Are and When You Need Them

Life insurance and accidental death and dismemberment insurance (AD&D) are two types of coverages that pay out a benefit if you die. Although similar in that regard, life insurance and AD&D insurance are not the same thing.

If you’re shopping around for a new policy, you may be wondering how AD&D and life insurance differ from one another. We’ve got you covered. First, we’ll walk you through the basics of both types of insurance. Then, we’ll take a look at what is and is not covered under each policy. This should help you decide which type of insurance coverage you need.

Let’s jump in.

In this article

  • AD&D vs. life insurance: The basics
  • What does AD&D insurance cover?
  • What does term life insurance cover?
  • FAQs about AD&D vs. life insurance
  • How to get the right coverage

AD&D vs. life insurance: The basics

At first glance, AD&D and life insurance appear to provide similar coverage. Both pay out a death benefit, but it’s important to know how they differ to ensure you get the coverage you need.

The main difference between these two types of insurance is the cause of death that’s covered. AD&D is a type of insurance that pays out in certain instances of death by accident, whereas life insurance provides financial protection for your family in most cases of death.

Here’s what the two types of insurance typically cover:

AD&D insurance Term life insurance
Does it expire? Yes Yes
Death by accident Yes Yes
Death by murder Yes Yes
Death by natural causes (old age, heart attack, cancer) No Yes
Death by suicide No Yes*
Death by drug overdose No Yes*
Death while committing a crime No No
Loss of limb or finger Yes No
Loss of eyesight, hearing, or speech Yes No

*Unless during first two years of coverage

In short, AD&D shouldn’t be treated as an alternative to life insurance but rather an insurance policy that provides additional coverage.

What does AD&D insurance cover?

Simply put, AD&D insurance covers both accidental death and the accidental loss of a limb or digit. AD&D can be purchased as a standalone policy or as a rider connected to a life insurance policy. A life insurance rider is an optional, additional term or coverage you pay for. Because AD&D comes with many restrictions (e.g., your death or dismemberment comes as a result of certain accidents), it provides the most comprehensive coverage when combined with a life insurance policy.

AD&D insurance generally pays out in the following situations:

  • Death caused by an accident, such as a car crash or work accident
  • Death by murder
  • Loss of limb or finger
  • Loss of eyesight, hearing, or speech

Beyond that, AD&D has many exclusions. For example, AD&D won’t pay out if you die from something like a heart attack, old age, or other natural cause.

If you travel often or feel like you’re more at risk of injury because of your occupation, you might consider AD&D insurance. If you already have a life insurance policy, contact your insurer about adding AD&D coverage to your policy.

What does term life insurance cover?

Term life insurance is a form of life insurance that lasts for a defined period of time, or term, usually 10 to 30 years. During that time, you pay premiums to maintain coverage, but the policy has no cash value unless you die. If you were to die during your policy’s coverage period, your life insurance would provide your beneficiaries with a death benefit equal to your life insurance coverage amount. For example, if you have a $500,000 term-life policy and die before your policy expires, your beneficiaries would receive a death benefit in the amount of $500,000. At the end of your policy’s term, your coverage expires. You would then need to decide whether you need further coverage.

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Insurers often allow you to renew your term life insurance policies for one or more terms. You may have to pay higher premiums, so speak with your insurance agent about the exact terms of the renewal.

Term life insurance generally pays out in the following situations:

  • Death by accident
  • Death by murder
  • Death by natural causes, such as a heart attack or cancer
  • Death by suicide (unless within the first two years of purchasing the policy)
  • Death by drug overdose (may not be covered in certain cases)

A term life insurance policy is a good idea for most people, as it’s straightforward and affordable. However, you typically need life insurance only during certain periods of your life, such as when you have children or dependents who rely on your income. Aside from that, if you have no debt and significant savings built up to cover your end-of-life costs, such as funeral and burial expenses, you may not need life insurance at all.

FAQs about AD&D vs. life insurance

Do I need both AD&D and life insurance?

Whether you need both AD&D and life insurance depends entirely on your personal situation. For instance, if your family relies on your income, a combination of AD&D and life insurance may provide the coverage you need. If you don’t have dependants or anyone who relies on your income, you may find you don’t need life insurance or AD&D at all.

Is heart attack covered under accidental death?

Although it depends on the exact wording of the terms and conditions of your policy, death due to a heart attack is generally not considered an accident but a natural cause. Therefore, a heart attack typically won’t be covered under AD&D.

At what age should you get life insurance?

There’s no predetermined age as to when you should buy life insurance. The age of which you should consider getting life insurance depends whether you have family members who depend on your income.

How much life insurance do I need?

If your family doesn’t rely on your income to cover costs and you have enough in savings to cover your final expenses, you may not need life insurance. However, if you determine that you do need life insurance, you typically want to buy enough life insurance to replace your current income.

How to get the right coverage

If you determine life insurance is worth having, how do you go about getting it? If you have an existing life insurance policy and want to add AD&D to your policy, it’s probably easiest to contact your insurance agent to see what’s available to you.

If you’re shopping for a new policy or looking to change your existing coverage, online insurance marketplaces can be a simple solution. Through these platforms, you can often apply for life insurance coverage online from some of the best life insurance companies in just a few minutes and get an instant decision. It’s a simple and straightforward way to purchase the coverage you need.

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