AD&D vs. Life Insurance: Some people think life insurance needs are covered by an AD&D, but that is not true. They are different from each other. AD&D, which is the abbreviation of accidental death and dismemberment insurance, is different from every other life insurance policy. Understanding the distinction between AD&D and life insurance is crucial.
If you have been in search of insurance to cover your loved ones from financial difficulties when you pass on, getting a life insurance policy is a good idea. You may have also considered getting an accidental death and dismemberment insurance, generally known as AD&D. These two insurances may sound alike, but they are different from one another.
These insurers offer different types of insurance coverage along with terms and rates. While life insurance is purchased to shield your family from financial issues after you pass on, AD&D is also another type of insurance you can get. Read through this write-up to see how life insurance and AD&D are different.
What is Life Insurance?
Life insurance is a form of coverage that provides a death benefit to designated beneficiaries upon the policyholder’s passing. As long as the premiums are kept current, the policy remains active. In most cases, beneficiaries are not required to pay taxes on the death benefit. There are two main types of life insurance policies.
The types of life insurance policies are term life insurance and permanent life insurance. Term life insurance policies cover policyholders for a certain period, usually 10 to 30 years. It only pays off death benefits after the insured passes away. Permanent life insurance, mostly known as universal or whole life insurance, covers policyholders for their entire lifetime as long as premiums are paid. This policy pays death benefits if the premiums are paid up to date.
What is AD&D?
Accidental death $ Dismemberment insurance, abbreviated as AD&D, is a type of life insurance that pays benefits if ever a policyholder dies or gets injured. They offer coverage if the insured has an insurance policy that covers these circumstances.
This insurance covers occurrences like car accidents or injuries sustained as a result of an accident, which include loss of a limb or sight, speech, or hearing. Death or injury as a result of overdose, suicide, natural causes, illness, or high-risk activities is not covered by AD&D insurance. It also doesn’t cover injuries or death as a result of criminal activities or drugs and alcohol.
AD&D vs. Life Insurance: What is the Difference?
AD&D and life insurance have similarities, which are that they both offer benefits to beneficiaries after a policyholder passes away. However, the events these insurance policies make payments for are very different from each other. The table below illustrates the differences between these insurance policies.
| Events | Covered by AD&D Insurance | Covered by Life Insurance |
| Death by diabetes, heart attack, cancer, Alzheimer’s, stroke, and other illnesses | No | Yes |
| Death by murder | Yes | Yes |
| Death by plane accident | Yes | Yes |
| Death by suicide | No | Yes (after two years) |
| Death by drug overdose | No | Yes |
| Death by car accident | Yes | Yes |
| Loss of a limb, hearing, or eyesight | Yes | No |
These insurance policies vary from each other. In some cases, they can be similar to each other, making people think they are the same. Before purchasing any of these life insurance policies, you need to consider why you need this insurance and what you want it to cover.
Should you buy AD&D or Life Insurance?
AD&D and life insurance are both types of life insurance, but one does not cover the other. Because AD&D has limits on what it covers, it may not be a good idea for you to buy AD&D insurance if you intend to cover a growing family or a business. Getting a life insurance policy will cover a larger range of circumstances that lead to death.
To get a wider range of life insurance coverage, you may consider purchasing both types of life insurance. AD&D tends to be more affordable than the traditional life insurance policy. Sometimes, it is offered through an employer for free or at a lower cost. However, if you purchase a traditional life insurance policy that allows AD&D as add-ons, you can purchase it to get extra coverage on your life insurance without getting it separately.
Do I Need Both AD&D and Life Insurance?
If you want protection in case of an accident or accidental injury, you can add Accidental Death and Dismemberment (AD&D) insurance to your life insurance policy. Alternatively, you may choose to purchase both life insurance and AD&D coverage separately, either from the same insurer or from different companies, to ensure broader protection.
