Accidental Death & Dismemberment(AD & D) vs Life insurance in 2023

After heart disease and cancer, accidents are the third most common cause of death in the U.S. According to the Centers for Disease Control, accidents are the number one cause of death for adults 25 to 44. In order to protect against accidental deaths, I believe having an insurance policy would make sense.

In the midst of the myriad of insurance options, deciding which policy is right for you can be a bit overwhelming. There are two main types of policies you can get to provide for those who rely on you: life insurance and accidental death and dismemberment (AD&D) insurance.

Although these two kinds of insurance are similar, they differ in some ways. There is a death benefit in both policies, but in an Accidental Death & Dismemberment (AD&D) policy, the benefit is only provided if you die on the job. On the other hand, life insurance has fewer restrictions. 

Find out more about AD&D vs Life Insurance and how they differ so you can decide which is best for you. 

What is Accidental Death and Dismemberment Insurance (AD&D) insurance?

The accidental death and dismemberment insurance (AD&D) policy is not the same as a standard life insurance policy. There is a death benefit, but as suggested by the name, you will only be covered in the event of an accident.

Also, the policy generally pays out a predetermined amount if you have been dismembered in an accident.

What is Life Insurance?

A life insurance policy is a type of coverage that pays out if you die within a certain time frame, regardless of how you died.

The policy pays out regardless of whether you die of an illness, accident, or other cause.

In most cases, only suicide is excluded from coverage during the first two years of policy ownership. (The specifics will be spelled out in your policy).

Accidental Death and Dismemberment Insurance (AD&D) vs life insurance: How Do They Work?

How Does Accidental Death and Dismemberment Insurance Work?

AD&D insurance fills in financial gaps that aren’t covered by other types of policies. When you lose a leg in a car accident, you can get help paying your hospital and rehab expenses through your medical payments coverage of your car and health insurance.

AD&D insurance, on the other hand, pays a set amount for the loss of a limb. If you die in an accident covered by AD&D insurance, you will receive a death benefit.

A benefit is paid according to how much coverage you have (the face amount of the policy) and what kind of injury you have sustained.

For example, if you lose an arm or leg, your policy may pay you half of the coverage amount directly, but in the event of your death, your beneficiaries would receive 100%.

How Does Life Insurance Work?

A life insurance policy is a type of insurance contract. You must pay premiums in order to maintain the coverage in an insurance policy.

As long as you named someone as your beneficiary, your life insurance company will be able to pay the death benefit if you die.

Death benefits and living benefits are both possible with some types of life insurance policies. With a living benefit rider, you can access your policy’s death benefit while you are alive. In cases where a person is terminally ill and needs funds to pay for medical care, this type of rider can be helpful.

“Some life insurance companies have designed policies that allow their policyholders to draw against the face value of the policy in the event of a terminal, chronic or critical illness.

These policies enable the policyholder to be the beneficiary of their own life insurance policy,” says Ted Bernstein, owner of Life Cycle Financial Planners LLC.

Accidental Death and Dismemberment Insurance (AD&D) vs Life Insurance: What do they cover?

What Does Accidental Death and Dismemberment Insurance (AD&D) Cover?

The AD&D coverage will specify which accidents and injuries can be covered. It depends on your insurance policy whether accidental dismemberment includes both loss of a limb and serious injuries that prevent you from working. Among the accidents covered by AD&D would be:

  • Car accidents
  • Workplace injuries or death
  • Fire-related injuries or fatality
  • Accidents with firearms
  • Falls and other injurious accidents

Nevertheless, AD&D insurance policies do not cover natural causes of death, like cancer or heart attacks.

What Does Life Insurance Cover?

The death benefit you receive from your life insurance is paid to the beneficiaries you select. In addition to funeral expenses, debt settlements, and estate costs, a death benefit can help reduce the financial burden of your affairs. 

Additionally, unlike AD&D policies, it could be used to cover debts and obligations like mortgage payments and college tuition. According to insurance expert Laura Adams, “The purpose of life insurance is to make sure that people who depend on you, such as a spouse, partner, children, and aging parents, wouldn’t be hurt financially after your death.”

AD&D vs Life Insurance: Pros and Cons

It is a common misconception that AD&D insurance serves as a financial safety net in the event of sudden death. “It gives them a false sense of security,” Voegele says. Because AD&D provides limited coverage, it isn’t right for everyone.

AD&D Pros

  • To get AD&D insurance, you don’t have to take a medical exam. Furthermore, you will not need to answer any health-related questions, which is an appealing feature for people with pre-existing conditions that make finding life insurance difficult.
  • There will be no denial of coverage because of your health. It’s just a matter of meeting the age requirements. Generally, you have to be between 18 and 80 years old.
  • Getting coverage is quick and easy. You can apply for insurance within a matter of days or even minutes if you purchase a policy online, as there are no lengthy questionnaires to fill out, no medical exams to complete, and no waiting period.


  • There is limited coverage. You do not have to die in a car crash to qualify for AD&D benefits-but there are many other ways to die as well. Limited coverage is one of the biggest drawbacks of AD&D.
  • As cheap as it appears, coverage isn’t really cheap. It is less expensive than life insurance when it comes to AD&D. This is due to the relatively low probability of an AD&D payout. “The odds of you using it are so far down the scale that it becomes expensive for the payout,” Voegele says.
  • Leaving your job could result in you losing your insurance coverage. Most people who have AD&D insurance get it through a group plan at work, Voegele says. In many cases, if you leave your job, you don’t have access to that coverage.

Life Insurance Pros and Cons

Even though life insurance can serve as a financial safety net, it might be expensive. That’s why it’s imperative to understand the benefits and drawbacks of life insurance.


  • Peace of mind
  • Tax benefits
  • Savings when you need it


  • Another expense
  • Cost of insurance
  • There’s a learning curve

Accidental Death and Dismemberment Insurance (AD&D) vs Life Insurance: How Much do They Cost

How Much Does AD&D Cost?

AD&D policies typically have lower rates than traditional life insurance because they cover only accidents. You might also be eligible for free AD&D insurance benefits from your employer if AD&D insurance is available.

The amount of AD&D insurance you purchase determines your premium. If Farmers offers accidental death coverage at $100,000 per year, monthly premiums could start at $4.50. 

Fabric offers coverage costs as low as $6 a month for $100,000 and as high as $30 for $500,000. When shopping for the best rate, it may be advantageous to shop around because rates may differ from insurer to insurer.

How Much Does Life Insurance Cost?

There are a number of factors that determine how much life insurance costs. A major cost factor will be the type of life insurance you purchase. For instance, term life insurance policies for the same amount of coverage are significantly less expensive than whole life policies.

The following are some of the most common factors influencing life insurance rates:

  • Age. The younger you are when you buy a policy the less you’ll pay. That’s because your chance of death is smaller.
  • Sex. Females have a life expectancy that is nearly five years longer than males, according to the National Center for Health Statistics. This means that men generally pay more for life insurance than women (except in Montana where insurers must provide gender-neutral life insurance rates).
  • Health. Your health has a major impact on your life insurance rates. The insurer will evaluate your past and current medical conditions in order to calculate your life expectancy.
  • Lifestyle. Your driving history (such as a DUI conviction), criminal record, and dangerous occupations and hobbies (such as scuba diving) can all result in higher life insurance rates.

Choosing a Life Insurance Beneficiary

You’ll have to decide on a beneficiary or beneficiaries when you buy life insurance. It is this beneficiary who will receive the death benefit upon your death. A life insurance beneficiary can be:

  • A spouse
  • Parent
  • Sibling
  • Adult child
  • Business partner
  • Charitable organization
  • A trust

You can choose to name a single beneficiary or a primary beneficiary and one or more contingent beneficiaries.

A contingent beneficiary would receive death benefits from your life insurance policy if the primary beneficiary passes away.

Note: Minor children can’t be named as beneficiaries of a life insurance policy.

Who Should Get AD&D Insurance?

AD&D insurance only pays out when there is an accident, so it might not be the right choice for everyone. Still, there are situations where it may be worth it.

  • If it’s a free workplace benefit. “If it’s offered for free, absolutely take it,” Voegele says. “Even if you have to pay for a workplace policy, I would recommend that you consider the value you receive to choose if the coverage you’d be getting is worth the cost.” In other words, make sure you evaluate the value of a workplace policy that you would have to pay for.
  • If you can’t afford life insurance. “Accidents are the top cause of death for younger people,” Kade says. “So if this is all they can afford, it is better than nothing, certainly.”

Differences Between AD&D vs life insurance

Here’s a breakdown of what each policy type covers.

The situationLife insuranceAD&D
Death due to illness (e.g., stroke or heart attack), disease (e.g., cancer), or natural causesYesNo*
Death due to an accident or unnatural causes (e.g., traffic accidents or falls)YesYes
Death due to drug overdose or suicide (See paragraph below.)YesNo
Loss of a limb, sight, hearing, or speech (See paragraph below.)NoYes
Loss of use of limb(s) due to partial or permanent paralysis (See paragraph below.)NoYes

Do I need both life insurance and AD&D?       

In the event of your death or dismemberment, accidental death and dismemberment (AD&D) insurance can help protect the finances of your family. When you’re seriously injured or die as a result of an accident, life insurance or medical coverage can be an affordable addition. 

AD&D is not a substitute for life insurance, but it may be a good supplemental policy. When you die, and you are no longer able to contribute financially to the household, a Term or Whole Life Insurance policy can reduce your family’s financial burden.


The benefits of term life insurance are far broader than AD&D insurance, and they may not cost much more if you qualify.

So, if you’re concerned about accidents, adding an AD&D rider to a basic life insurance policy makes more sense than buying a separate policy.

In general, AD&D protection may still be better than no coverage if you don’t qualify for standard life insurance.

Since AD&D policies don’t require a medical exam, it may be easier to qualify for them, and you can often obtain one faster than a standard life insurance policy.



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