pays benefits to the beneficiary
Accidental death and dismemberment is a policy that pays benefits to the beneficiary if the cause of death is an accident. This is a limited form of life insurance which is generally less expensive.
what your policy covers
Accidental death and dismemberment (AD&D) insurance covers loss of speech, eyesight or hearing, loss of limbs or fingers, coma or paralysis resulting from an accident, and death resulting from an accident. The injuries or death need to be the result of an accident that is covered by the AD&D insurance policy.
Accidental death and dismemberment insurance may be purchased with our association or, as a stand-alone product . It can also be added as a rider on a life insurance policy. Unlike term life insurance, AD&D policies pay out only if you are killed or injured in an accident.
The exact payouts will be listed in your policy. For example, an AD&D policy from XYZ Financial offers these payouts, among others, as a percentage of the policy’s face value. For example, if the face value is $10,000, a 50% payout is $5,000.
Therefore, if your goal is to provide your family with a financial safety net if you die, life insurance is the right purchase. AD&D could be a good supplemental policy if you already own life insurance.