What is the difference between accident insurance and accidental death and dismemberment (AD&D) insurance?

Accidents tend to happen when you least expect—you can’t plan for them, but you can be prepared. If you want to make sure you are protected in the event of an injury, different types of coverage can come into play, such as accident insurance and accidental death and dismemberment (AD&D) insurance. Although they both cover accidents, they are different. The following are some important points to remember as you decide which one is right for you.

Accident insurance

Accidental death and dismemberment (AD&D) insurance

How does it work?

Accident insurance will pay a benefit for a wide variety of covered injuries that may or may not be serious over the long term.

If you experience a covered accident, you could receive a cash benefit, according to a benefits schedule. Also, you could receive a cash benefit for emergency room visits. The amount you receive depends on your injury and related treatment.

AD&D insurance provides a payment to your beneficiary if you die in a covered accident or a payment to you if the accident results in a covered loss that cause a permanent impairment. Depending on your plan, you may be able to sign up for an amount of coverage based on your salary—for example, two times your salary—or choose a set dollar amount.

AD&D insurance is often offered with life insurance at an amount that is equal to the life insurance benefit. Only voluntary, AD&D insurance allows independent election of coverage

What is covered?

The following are examples of covered injuries:

  • Fracture
  • Dislocation
  • Eye injury
  • Gunshot wound
  • Paralysis
  • Brain injury
  • Burn
  • Coma
  • Concussion
  • Death
  • Dismemberment

The following are examples of covered losses:

  • Death
  • Quadriplegia
  • Loss of sight in at least one eye
  • Loss of speech
  • Loss of hearing
  • Loss of limb
  • Loss of thumb or index finger

Who can be covered?

If you elect coverage for yourself, coverage may also be available to your spouse and dependent children as well.

How can I use the benefit?

Accident insurance provides a lump sum cash benefit that you can use however you want. Typically the benefit is used to help with out-of-pocket expenses such as copayments or prescriptions that might not be covered by your health insurance.

You or your beneficiaries can spend the money however you see fit.

How much will I receive?

If a claim is approved, a check is sent for covered injuries, such as fractures or dislocations. The check can be used for costs related to those injuries, such as fees for emergency room or out-patient visits.

The benefit depends on the site and severity of the injury in addition to how the injury was treated and what coverage amount you selected when you enrolled.

In the event that a covered accident results in your death, your beneficiary will receive 100% of your AD&D coverage amount. The maximum amount payable for losses resulting from any one accident is 100% of the AD&D coverage amount.

Accident insurance and accidental death and dismemberment insurance may be something you don’t want to think about, but they can help you plan for the unexpected so that you and your family have one less thing to worry about in case of an accident. Additionally, in some cases, if you are covered by both products and your claim is approved, both benefits may pay out, in the event the injury qualifies under both insurance policies.

Check with your benefits administrator to see if accident insurance or accidental death and dismemberment insurance is available to you as part of your employer’s benefits package.

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SLPC 25552 12/15 (exp. 12/17)

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