Accidental Death and Dismemberment (AD&D) Insurance Explained

This type of insurance covers most accidental deaths and injuries, but it doesn’t replace life insurance.
Katia Iervasi
By Katia Iervasi 
Edited by Lisa Green Reviewed by Tony Steuer

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Accidental death and dismemberment insurance kicks in if you die or get seriously injured in an accident, such as a car crash. And unfortunately, accidents do happen — they’re the fourth leading cause of death in the U.S., according to the Centers for Disease Control and Prevention’s latest mortality data from 2021

Centers for Disease Control and Prevention. Leading Causes of Death. Accessed Aug 7, 2023.

While AD&D insurance overlaps with life insurance and disability insurance, it doesn’t fully replace either one. It offers some financial protection, but the coverage is limited — so it isn’t right for everyone.

What is AD&D insurance?

AD&D insurance combines two types of coverage: an accidental death policy that pays out if you die in an accident, and a dismemberment policy that pays out if you have a serious injury such as losing a limb or becoming paralyzed because of an accident. The beneficiary of your AD&D policy (such as your spouse) collects the money in the case of an accidental death, and you collect it if you suffer one of the injuries outlined in the policy.

Here’s the catch: The death or injury must be the direct result of an accident. So, for example, if you have a heart attack while you’re driving and get into a fatal car crash, your beneficiaries probably won’t receive any money.

While AD&D insurance can offer financial peace of mind to you and your loved ones in the event of an accident, it won’t pay out if you die from natural causes or a terminal illness — so it’s not a replacement for life insurance. And since it doesn’t cover all injuries or disabilities, it isn’t as comprehensive as disability insurance either.

Be aware that insurers often sell accidental death insurance without dismemberment coverage. These policies pay out only if you die and won’t cover an accident that leaves you seriously injured but alive.

What does AD&D insurance cover?

Accidental death and dismemberment insurance generally covers incidents that can't be foreseen, such as falls, traffic accidents and homicides. If you die in an accident, your beneficiaries will most likely get a full payout of the face value of your AD&D policy.

As for injuries, covered dismemberments vary between insurers. They may include:

  • Loss of a limb or finger.

  • Loss of sight, speech or hearing.

  • Paralysis.

  • Injuries caused by work-related machinery.

Payouts are linked to the severity of your injury. If you lose one body part — such as a finger, hand, foot, limb or sight in one eye — insurers typically pay 25% to 50% of the benefit amount. If you lose two body parts, you're likely to receive the full payout. And for paralysis, most insurers offer the full payout for quadriplegia, which affects both arms and legs, and a partial payout of 50% for paraplegia, which affects only the lower half of the body.

Some policies pay additional benefits for injuries or deaths due to accidents while riding a bus, train, plane, ferry or taxi as a fare-paying passenger.

What isn’t covered by AD&D insurance?

AD&D insurance policies typically exclude coverage for accidental injuries or deaths resulting from the following:

  • Drinking and driving.

  • Natural causes.

  • Physical illness, such as COVID-19.

  • High-risk activities, such as skydiving.

  • War.

  • Suicide or attempted suicide.

  • Drug overdose.

With most insurers, a death must occur within three to 12 months after the accident to qualify as a covered event.

When you’re comparing policies, be sure to read the fine print to find out what is and isn’t covered, and the time frame each insurer works with.

How to sign up for AD&D insurance

The most common way to get AD&D insurance is through the workplace. Many employers offer it as part of their benefits package, and they may give you the option to add your spouse or children to the policy.

You can also buy stand-alone policies directly from insurers or through a bank or credit union. In some cases, acceptance is guaranteed, which means you don’t need to take a life insurance medical exam or answer health questions to qualify for coverage.

Some insurers also allow you to add an accidental death or AD&D rider to your individual life insurance policy for an additional premium. With this rider in place, your life insurance beneficiaries will receive an additional lump-sum payout if you die in an accident, and you’ll get the money if you’re injured as the result of a covered accident. Since this rider typically doubles the payout of your life insurance policy if you die in an accident, it’s also known as a “double indemnity" rider.

The cost of AD&D insurance

Because AD&D insurance is limited to accidents, it tends to be cheaper than traditional term life insurance.

For example, for a 40-year-old applicant, a $200,000 AD&D policy would cost $13 a month, according to Quotacy, a Minneapolis-based life insurance brokerage. To compare, a term life policy of the same value would be around $15 a month.

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AD&D insurance vs. life insurance

With life insurance, the coverage is broader. It pays out when you die, whether it be from old age, an underlying health condition or an accident, and there are some life insurance riders that will pay out if you’re diagnosed with a chronic, critical or terminal illness. Term life insurance can be relatively cheap, especially if you apply while you're young and healthy.

AD&D insurance pays out for death only in certain circumstances, and it doesn’t cover natural causes or illnesses. But it does provide a payout if you lose a body part (or the use of it), which life insurance doesn’t.

Key differences between AD&D insurance and life insurance

AD&D insurance

Life insurance

Amount of coverage you can buy

Policies typically max out at $500,000.

Varies by insurer but can reach $10 million or more.

How long coverage lasts

Set number of years.

Term policy: Set number of years. Permanent policy: Typically your entire life.

Covers death by natural causes?



Covers death due to an accident?



Covers death due to a drug overdose?


It depends.

Covers death due to homicide?



Covers death due to suicide?


Yes, if the policy has been in effect for one or two years depending on the insurer.

Covers injuries or paralysis due to an accident?


No, unless policy has an AD&D rider.

Covers loss of digits, limbs, sight, hearing or speech?


No, unless policy has an AD&D rider.

The big question: Is AD&D insurance worth it?

The main thing to remember is that AD&D coverage supplements life insurance, which helps cover expenses after you die, and disability insurance, which covers you if you’re injured and can’t work. If you have dependents who would suffer financially if you died, the safe bet is to buy life insurance first. To protect your income in case you become ill or injured and can’t work, look into disability insurance.

If your employer offers AD&D insurance at no charge, it’s worth opting into that perk. Otherwise, you may want to buy an AD&D policy only if you have a risky job or hobby and are prone to accidents as a result. In those cases, a stand-alone policy might be worth the extra cost.

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