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Accidental Death and Dismemberment Insurance

Accidental death and dismemberment insurance can be a separate policy unto itself or it can be added as a rider to an existing life or health insurance policy. You may even get offers for accidental death and dismemberment insurance policies from credit unions or credit cards. While a policy is reasonably affordable, having this type of insurance is not right for everyone, like those who inflict self injuries intentionally.

How It Works

Accidental death and dismemberment insurance pays either the policy holder or the beneficiary of the policy in the event of death or dismemberment which occurs as the direct result of an accident. When signing up for an accidental death or dismemberment policy, you will have the option to add on coverage for hospital stays or to add a spouse or children.

Fatal accidents and the loss of vision, hearing, speech or limbs may be covered by an accidental death and dismemberment insurance policy. Any injuries or death need to be proven to be a direct result of an accident to receive the benefits of the policy. Once the injuries or death have been proven, it may take a few months of the accident to begin to receive the benefits from the policy.

Limitations of the Policy

The variety of outcomes of an accident covered by an accidental death or dismemberment policy are limited in scope. Death resulting from an accident is 100% covered. Dismemberment is covered on a per member basis, meaning that each appendage lost is only covered at 50%. For example, if you lose one arm in an accident, you will only receive 50% of your benefits. If you lose both arms, you will receive 100% of your benefits.

There are further limitations to an accidental death and dismemberment policy. Many policies only cover the ankles and above. They also do not cover death that occurs during a surgery, or as a result of a mental or physical illness, bacterial infection, hernia or caused by a drug overdose. Death or dismemberment caused by a policy holder's participation in risky activities such as sky diving, serving in a war or automobile are also not covered.

While an accidental death and dismemberment policy is relatively inexpensive, with policies starting at around $60, they may not end up being all that beneficial to those that hold them. Because of the low cost, they do not pay out a large amount in benefits. They are also limited in what they cover and will not include accidents that occur if the policy holder was doing something the insurance company deemed to be risky.

Having an accidental death and dismemberment insurance policy may be right for some, however. If you want the extra peace of mind that this type of insurance can bring, its an option. For those who do jobs that involve an inherent risk, having an accidental death and dismemberment policy may make sense. In the event of an accident, it can be help to pad worker's compensation benefits. It may also come in handy while waiting to receive worker's compensation benefits, if the accident occurred while on the job.

While obtaining an accidental death and dismemberment insurance policy may seem like the smart thing to do, it may only be valuable insurance for those who do risky jobs. Benefits from an accidental death and dismemberment insurance policy may serve as a stop gap for the policy holder or the beneficiaries while they are waiting for the worker's compensation benefits to come through. For most, however, your money is better served by getting a more comprehensive life insurance policy.

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