Accidental death and dismemberment insurance or AD&D for short is a type of life insurance policy similar to Term that is often used for those in a high risk physical job-but only a small subset of people benefits from this type of policy.
Let me explain,
These types of policies are great because they are even more affordable then a term life policy…BUT… they have many more death restrictions to get your payout .
Here’s more…
To keep things simple; these types of policies are typically “add-on” policies to a life insurance policy. If you are someone that works in a high risk environment and at high risk for death or loss of limb/sight/hearing. These policies will pay out all or some of the policy benefit for such a situation.
These polices often DO NOT cover:
Maybe a term life insurance policy is too expensive. Maybe you have significant health problems and getting a typical insurance policy just isn’t feasible but you work in a high risk environment and want some financial protection if you are killed/injured.
These AD&D policies are more affordable, often do not require medical exam but also DO NOT typically offer as much in coverage as a Term policy would.
Often these are added on as “riders” to a traditional term policy when someone works in a high risk environment.
Also the nice thing about AD&D is that it covers dismemberment…not just death. If you are unable to work due to accident these policies will often pay out some if not all of the benefit.