Accidental death insurance is a type of insurance policy that provides financial benefits to the insured or their beneficiaries in the event of accidental death, serious injury, or dismemberment resulting from an accident. It is also known as accidental death and dismemberment (AD&D) insurance. This insurance policy pays benefits in addition to any life insurance but only up to a set amount total regardless of any other insurance held by the same insurer, held by the client. This is called double indemnity coverage and is often available even when accidental death insurance is merely an add-on to a regular life insurance plan.
Accidental death insurance covers a wide range of accidents, including traffic accidents, exposure, homicide, falls, heavy equipment accidents, and drowning. However, it is important to note that 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 clients are paying only for sustained protection. Most policies have to be renewed periodically (with revised terms), although the clients consent with renewal is often implicitly assumed. Common exclusions include death by illness, suicide, non-commercial aviation, war injury, and natural causes. Similarly, death while under the influence of any non-prescribed drugs or alcohol is most likely exempt from coverage.
It is important to note that AD&D insurance is not the same as life insurance. Life insurance pays out a benefit when the insured dies from any cause, while AD&D insurance only pays out a benefit when the insured is in a covered accident that results in death or dismemberment.
In summary, accidental death insurance is a type of insurance policy that provides financial benefits to the insured or their beneficiaries in the event of accidental death, serious injury, or dismemberment resulting from an accident. It covers a wide range of accidents, but there are common exclusions. AD&D insurance is not the same as life insurance, and it is important to read the fine print to understand the coverage limitations.