No one wants to think about it, but if your employees are involved in an accident that results in their death or dismemberment, it can be devastating to their families and your business. Including Accidental Death and Dismemberment (AD&D) coverage in your employee benefit plan can help to provide benefits to your employees or their families in the case of an accident.
Types of Accidental Death and Dismemberment (AD&D) coverage
Accidental Death Coverage
AD&D coverage can be added in addition to any traditional life insurance policy. If your employee is involved in an accident and dies within 30 days due to that accident, AD&D insurance will provide an additional death benefit to their beneficiaries.
Dismemberment coverage typically includes lump sum payments for the loss or loss of use of a limb(s), vision, hearing, or a combination. Depending on the loss, payment will be varied as defined in the contract.
Frequently Asked Questions
Can I purchase AD&D Insurance on its own?
Accidental death benefits can be purchased on a stand-alone basis from many insurance agencies. Typically, there is a cap on the amount of coverage available.
Who needs AD&D Insurance?
Anybody can benefit from AD&D insurance. Of course, no one wants to prepare for accidental death or loss of limbs; however, certain people may need it more than others. The purpose of this type of insurance may be to provide your employees with protection if they are involved in riskier activities and may have difficulty purchasing traditional life insurance at a reasonable rate.
Examples of a risky activity that insurance companies are careful about include:
- Backcountry activities
- Scuba Diving
- Extreme Sports
- High-Risk Jobs
In these cases, your employees may be able to get traditional life insurance but be excluded from a payout if they die while performing the risky activity. In some cases, your insurance provider may offer life insurance but charge an additional high rating because of their hazardous hobby or profession.
What if I want life insurance, but I am involved in high-risk activities?
Suppose your hobbies or job puts you at a higher risk than the average person. In that case, a solution may be requesting your insurance provider to place a ‘normal’ life insurance policy in place while excluding your risky activities. In this case, you can purchase AD&D Insurance to cover your dangerous activities at a lower cost.
The shortfall of this route is your maximum coverage may be lower than what you’d prefer to have.
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