Accidental Death and Dismemberment (also known as AD&D) is a policy that pays benefits to the
beneficiary if the cause of death is due to an accident. This is a limited form of life insurance which is
generally less expensive.
In the event of an accidental death, this insurance will pay benefits in addition to any life insurance, but
only up to a set amount total regardless of any other insurance held by same insurer. Accidental deaths
are the fifth leading cause of death in the U.S. as well as in Canada.
Accidental Death insurance is not an investment vehicle and thus clients are paying only for sustained
protection. Insurance premiums are expected to rise in time. Most policies have to be renewed
periodically (with revised terms), although the client’s consent with renewal is often implicitly assumed.
Every insurer maintains a list of events and circumstances that void the insured’s entitlement to his or
her accidental death benefit. Death by illness, suicide, non‐commercial radiation, war injury and natural
causes are generally not covered by AD&D. Similarly, death while under the influence of any nonprescribed
drugs or alcohol is most likely exempt from coverage. Overdose with toxic or poisonous
substances and injury of an athlete during a professional sporting event may void the right to claim too.
Some insurance carriers will tailor their clients’ coverage to include some of the above risks, but every
such extension will be accompanied by increased premiums.
Due to these restrictions, the process of claiming the benefit may be relatively lengthy; the deceased
client may have to undergo autopsy and the accident may have to be officially investigated before a
claim is approved by the insurer.
Fractional amounts of the policy will be paid out if the covered employee loses a bodily appendage or
sight because of an accident. Additionally, AD&D generally pays benefits for the loss of limbs, fingers,
toes, sight and permanent paralysis. The types of injuries covered and the amount paid vary by insurer
and package, and are explicitly enumerated in the insurance policy.
All of SYIG group insurance policies automatically include some AD&D benefits and most of our
individual policies also offer AD&D benefits. Keep on mind that we can often increase the limits based
on what you’re looking for and customized group options are available upon request. We have noticed
an increased interest in Group AD&D Coverage after the MLC took in effect in August 2013.