New BusinessBENEFITS

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  • Accidental Death & Dismemberment

    Game Plan


    Offer AD&D as a Basic Voluntary Coverage

    Accidental death and dismemberment insurance policies are most commonly offered as a voluntary employee supplement to a life insurance policy. Depending on how your benefits program is set up—and your decision as an employer regarding what you’d like to make available to your employees—you have the option of making available either a separate policy, or an AD&D rider to an existing life insurance plan.

    Double Indemnity
    Just like the characters in the well-known known film noir starring Edward G. Robinson as a claims adjustor, AD&D takes advantage of “double indemnity.” If your employee has an existing life insurance policy and an AD&D policy, and dies because of a covered accident, his or her beneficiary is entitled to payouts from both policies. Thus, if the AD&D policy is set up as a rider to life insurance, the policy benefit doubles. (If it’s set up separately, the payout from the AD&D policy would be whatever coverage protection is contractually agreed upon in the plan.)

    AD&D Policy Costs
    Accidental deaths are not common. According to the Centers for Disease Control and Prevention, they are the fifth-most likely cause of death in the U.S.—about 39 per 100,000 per year. Because the events that give rise to an AD&D claim are fairly rare, these policies tend to be very affordable, usually costing a lot less than a life insurance policy with a similar payout.

    Game PlanGame Plan

    Game Plan

    • Unlike some types of life insurance, AD&D is not an investment vehicle. If you plan to offer an AD&D to your employees, make sure they’re given the opportunity to know what kinds of protections it provides—and what’s excluded.
    • Like other voluntary benefits, AD&D premiums are usually paid by the employee as a payroll deduction.