Accidental Death and Dismemberment (AD&D) coverage is normally offered as a rider on health or regular life insurance policies, or as a part of voluntary deduction supplemental insurance offered to an employee group.
AD&D policies provide separate coverage and terms for the instance of death by accident and the loss of limbs or specific functionality of body parts.
The main attraction to this insurance is that it is very affordable, and many employees check to box to have it deducted from their pay because it is such a negligible amount.
Anyone who knows a thing about insurance, however, will understand that this low premium is due to the extremely low probability that the company will have to pay out any benefits for these risks. Accidental death contracts only pay for death by accident, and contain many exclusions.
When a person files a claim for such a policy, it could take up to a year to actually receive a death benefit, because the company will need to investigate to determine the exact cause of death, whether it occurred in the course of an excluded activity or felony, and how log the insured remained alive after the alleged cause of death.
If a person dies from an infection related to the treatment of injuries sustained during an accident, it would be a coin toss as to whether benefits would be paid. Other forms of life insurance may have higher premiums, but they should cover any cause of death (after a two year contestability period and sometimes a suicide exclusion).
When accidental death coverage is attached as a rider onto a regular life policy, it is sometimes called a double-indemnity policy.
These policies also usually expire at an age around 65.
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