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 December 15, 2019

Do You Need ADD Insurance If You Have Term or Whole Life Insurance?

adding ad&d insurance

What is AD&D Insurance?

Accidental death and dismemberment (AD&D) insurance provides coverage should the insured suffer unintentional death (accidental death) or dismemberment.1 Typically applied as a rider to an existing health insurance or life insurance policy,1 AD&D is commonly offered by an employer in addition to whatever policy they may offer.2 However, because of coverage limitations, prospective buyers should tread carefully before investing.

I. Accidental Death

AD&D policies typically pay a death benefit to the beneficiary in the event that the insured accidentally dies.1 The key word here is “accidentally,” meaning that AD&D policies only pay a death benefit if the insured dies in what the policy considers to be an accident.2 The definition of “accident” ranges by policy, and in some cases an AD&D policy may not provide coverage in the event that insured dies while partaking in a ‘high-risk’ hobby (e.g. scuba diving, sky diving, free climbing). Again, what is considered an accident and high-risk vary by policy, so it’s important to review what exactly it is that your policy covers before deciding to enroll.

II. Dismemberment

Unlike term or whole life insurance options, AD&D offers coverage in the event that the insured suffers dismemberment. While the covered injuries differ with each insurer and policy, AD&D provides a benefit to those suffering dismemberment, and in some cases, may provide coverage in the event of loss of speech and hearing, and different forms of paralysis.1

How Term Life Differs

The biggest difference between a term life insurance policy and AD&D is that term life insurance may pay out a death benefit regardless if the death was accidental or not,3 where AD&D only pays out a death benefit if the death is accidental.1 But that’s not all— term life, unlike AD&D, does not pay out a benefit if the insured suffers dismemberment, paralysis, or loss of eyesight or hearing. In summary, if you want to increase your covered incidences, term life may provide a greater chance you’re your beneficiaries receive their death payout.

How Term Life Differs

Like term life, whole life insurance does not provide a benefit to the insured should they suffer from dismemberment, loss of hearing, loss of eyesight, or paralysis. Whole life insurance is also a form of permanent life insurance, allowing the insured to accumulate cash value within their policy.4 That is to say, while a whole life insurance policy won’t pay a benefit to those suffering from dismemberment, hearing loss, loss of eyesight, or paralysis, the insured may withdraw money from the cash value of their policy to pay for costs related to such events.4 In addition, whole life insurance does not require that the death be accidental, whereas AD&D policies can only provide a death benefit in the case of covered accidental death, which can have its own stipulations.1


While you may not need AD&D insurance, AD&D serves to complement existing health and life insurance policies that may otherwise not provide coverage to events such as dismemberment, loss of vision, loss of hearing, or paralysis (depending on the policy). That is to say, term life, whole life, and AD&D all do very different things and have nuances as to what they cover. As such, it is worth noting these differences to gain a better understanding of what you need, where to get it, and what you need to combine in order to have the most effective coverage for your situation.

  1. Investopedia, Accidental death and Dismemberment Insurance (AD&D), 2019
  2. ValuePenguin, What is Accidental Death and Dismemberment (AD&D) Insurance?, 2019
  3. Investopedia, Term Life Insurance, 2019
  4. Investopedia, Whole Life Insurance, 2018

Categories: Accident Insurance, Life Insurance, Term Life Insurance, Whole Life Insurance

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