Accident Insurance

Accident Insurance Policies

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Accident insurance is commonly referred to as accidental death and dismemberment (AD&D) insurance. If the death of an insured person is caused by an accident, the policy pays an agreed upon sum of money as a benefit to a designated beneficiary. As opposed to many forms of life insurance, there's no investment component to it. It's often an add-on to life policies available through employee benefit programs.

What's an accident?

An accident under a policy might be defined as a sudden and unplanned event that causes dismemberment or death without intention or design. It's an unexpected and unforeseen occurrence that isn't likely to happen.

What isn't an accident?

AD&D policies have their own exclusions for claims that result from occurrences that aren't defined as accidents. These include events like war, natural disasters, suicide or deaths or dismemberment that might involve illegal drugs or intoxication. Each policy specifically sets forth its exclusions.


Fractional policy benefits are paid by the insurer for blindness or loss of a body part as a result of an accident. Even paralysis is covered under some policies, but others won't cover dismemberment below the ankle. Policies carry schedules declaring what percentage of its total value will be paid for partial dismemberment. Partial dismemberment also has its own definition under each policy.

Double indemnity

Should an accidental death occur as defined in the AD&D policy, a benefit is paid on top of any life insurance that the policyholder may have had. This is often called double indemnity. It's ordinarily paid even if the life insurance and AD&D coverage were through the same company. Life insurance policies also have their own definition of double indemnity.

Time limits

AD&D policies provide a certain time within which a death must result from an accident. Death must be a direct result of the injuries suffered in the accident.

Accidental death isn't for everybody, but it's often offered in employee benefit plans.

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