Accidental Death and Dismemberment Insurance

The Dictionary of Insurance Terms and Definitions

Accidental death and dismemberment insurance is a special kind of life insurance, which provides indemnity only in the event that a death or injury is occasioned by accident.

Coverage and exclusion

Your insurer will define just what entails a covered "accident."  Most deaths which are not due to illness or suicide qualify as accidents.  For instance, for the purposes of accidental death and dismemberment insurance, "accidents" generally include not only traditional accidents but even homicide and drowning.

Dismemberment

With traditional life insurance (the kind that covers even non-accidental death), buyers are often interested in disability insurance as well, since death is not the only hazard that can impose a financial hardship on their family.  Accidental death and dismemberment insurance is already one step ahead, though: it includes coverage for certain disabling accidents, those which cost the insured the use of limbss, digits, eyes, or ears.

The indemnification received for some dismembering injuries will not equal the entire face amount of the insurance policy.  Your policy will stipulate just how large a benefit is paid for each type of covered dismembering accident.

Affordability

For people of sound body and early age, accidental death and dismemberment insurance makes an affordable alternative to ordinary life insurance.  Before middle age especially, the chance of a healthy person dying in an accident dwarfs the chance of any death not covered by accidental death and dismemberment insurance.

Accidental death and dismemberment insurance is cheaper than other types of insurance, in part because it excludes non-accidental deaths and in part because comparatively few claims are filed against it.

see also: Accidental Death Rider