AD&D Insurance vs. Life Insurance: What’s the Difference & Which One Should You Get?

Both financial products provide coverage, but there are distinct differences between accidental death and life insurance. While accidental death and dismemberment insurance only cover accidents, life insurance covers any death. Determining which is best for you depends on your budget, family and other needs.

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Last Updated: 11/17/2022
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Both financial products provide coverage, but there are distinct differences between accidental death insurance and life insurance. Accidental death and dismemberment, or AD&D insurance, only protect against death or dismemberment caused by accidents. In comparison, life insurance doesn’t have this restriction. It typically covers any death, making it a better choice for many people. However, the premium for AD&D insurance vs. life insurance tends to be more affordable.

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AD&D vs. Life Insurance: What Do They Cover?

The extent of the coverage given by AD&D insurance vs. life insurance varies. The best way to decide which one works best for your needs is to understand what they do or do not cover. The table below shows what you can expect from each in terms of what is covered.

Life Insurance vs. AD&D Insurance Coverage
  • Coverage
    Life Insurance
    AD&D Insurance
  • Death From Illness

    Yes

     

  • Death From Disease

    Yes

     

  • Death From Drug Overdose

    Yes

     

  • Death From Homicide

    Yes

    Yes

  • Death From Suicide

    Yes*

     

  • Death From Car Crashes

    Yes

    Yes

  • Death From Choking

    Yes

    Yes

  • Death From Drowning

    Yes

    Yes

  • Death From Slipping

    Yes

    Yes

  • Death From Falling

    Yes

    Yes

  • Loss of Eyesight

    Yes**

    Yes

  • Loss of Hearing

    Yes**

    Yes

  • Loss of One or Multiple Limbs

    Yes**

    Yes

  • Loss of Speech

    Yes**

    Yes

  • Partial or Permanent Paralysis

    Yes**

    Yes

*Death by suicide is covered by most life insurance policies, but only after a set period of time dictated by the contestability and suicide clause. Learn more.
**A life insurance policy can only cover losses in eyesight, hearing or limbs if it has an accidental death and dismemberment rider.

If you compare the protection of AD&D insurance vs. life insurance, you'll find that one offers more than the other. While life insurance pays a death benefit for most types of death, AD&D insurance only covers death and injuries caused by accidents.

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What Is the Difference Between AD&D Insurance vs. Life Insurance?

The difference between life insurance and AD&D lies in the situations that allow your beneficiaries to file a claim when you die or allow you to receive coverage while living.

Purchasing a life insurance policy can be a good investment. It ensures your loved ones receive financial support when you die. Life insurance covers most deaths, giving you peace of mind.

Accidental death and dismemberment also pay out a death benefit. However, insurance companies are stricter regarding the causes of death — they must be accident-related. In addition, you can file a claim if you sustain serious injuries, such as losing a limb or function.

Life Insurance vs. AD&D Insurance
  • Benefit
    Life Insurance
    AD&D Insurance
  • Cash Value

    Some kinds of life insurance policies
    have a cash value component. Each
    time you pay your premium, a portion
    goes into your policy's cash value.

    After several years, your money
    begins to accrue. You can use your
    life insurance's cash value for many
    things — for example, it can become
    a college fund or you can use it to pay
    for your premium.

    You can add an AD&D rider to your
    life insurance policy. However, it's also
    possible to purchase AD&D on its
    own. Although it provides a death
    benefit, it does not have a cash value
    component.

    Purchasing AD&D insurance covers
    deaths caused by accidents, but you
    cannot earn from it.

  • Death Benefit

    People typically invest in life
    insurance because it assures them
    that their loved ones can receive
    financial help by claiming their death
    benefit. The advantage of life
    insurance, whether term life or whole
    life, is that it covers most causes of
    death. These include natural causes,
    homicide and accidents.

    Accidental death and dismemberment
    insurance provide a death benefit.
    However, as its name implies, it only
    covers deaths resulting from an
    accident.

    It’s crucial to understand how
    insurance companies define
    accidental death. Definitions may
    vary between insurers, but these
    typically include drowning, choking or
    workplace-specific incidents.

  • Premium

    There can be a significant difference
    between the cost of life insurance vs.
    accidental death coverage.

    Rates vary between providers, but life
    insurance is generally more
    expensive. It’s understandable,
    considering it covers more causes of
    death. If you purchase a whole life
    insurance policy, it might cost you
    more due to having a cash value
    component.

    Compared to a life insurance policy,
    AD&D insurance is more affordable.
    However, remember that the reason
    behind that is its restricted coverage.
    Unless the cause of death is
    accidental, your chosen
    beneficiaries
    can't file a claim.

    Also, even if you can file a claim if you
    sustain a severe injury (such as losing
    a limb or paralysis), the circumstances
    surrounding it must fall within your
    insurer’s definition of accidental, and
    you may not receive the full amount of
    your benefit.

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If you're leaning towards getting accidental death insurance, it's best to read through the fine print of your policy. The definition of accidental death can vary between providers, so knowing which situations fall under it is essential when filing a claim.

However, the common causes of death insurers consider accidents include the following:

  • Drowning
  • Choking
  • Slipping
  • Car collision
  • Plane crash

Some professions may put you at a higher risk of accidental death. For example, commercial drivers or frequent travelers are more likely to be involved in car crashes.

How Much Does AD&D Insurance Cost Compared to Life Insurance?

From a cost perspective, you'll spend more money on life insurance than accidental death insurance. Even if you purchase a term life insurance policy, which is typically more affordable than whole life, AD&D insurance still comes out cheaper.

Although rates vary between providers and are affected by your age, life insurance's broader coverage is the primary reason for the difference in cost.

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Despite the difference in cost, a life insurance policy isn't excessively more expensive than an AD&D policy. But purchasing life insurance is a cost-effective strategy to get the most out of your money.

When you compare AD&D insurance vs. life insurance, the latter becomes a better option because it covers most deaths. It's particularly vital with estate planning.

Should You Get AD&D Insurance or Life Insurance?

Most people often get stuck, wondering whether they need both life insurance and AD&D insurance. Usually, the best approach is to get life insurance with an accidental death rider.

Understanding the pros and cons of accidental death and dismemberment coverage is essential to your decision. MoneyGeek details these in the section below.

Pros & Cons of AD&D Insurance

checkSign
PROS
  • A medical exam isn't necessary
  • Costs less than a term life or whole life policy
  • Faster application process
  • Can result in additional benefits (double indemnity)
denySign
CONS
  • Coverage is limited to specific situations only (accidents)
  • If your employer provides accidental death insurance, you may lose it if you leave the job
  • May not pay the full benefit amount for non-death incidents, such as loss of limb or paralysis

Heart disease and cancer are the leading causes of death in the United States. Unfortunately, an AD&D policy won't cover these, but life insurance will. It ensures that your loved ones receive financial support through the death benefit if your health condition worsens. You can also add riders to your policy, making it a more flexible option.

In comparison, accidental death and dismemberment insurance is a good idea if you're on a budget and working in an environment where accidents are more likely to happen. These may include construction sites or factories. Those who also spend more time behind the wheel or have jobs requiring frequent travel can benefit from an AD&D policy.

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If you're leaning towards purchasing accidental death and dismemberment insurance, it's best to shop around before deciding on a provider. Some insurers offer a separate policy, while others only have a rider that they provide with life insurance. MoneyGeek compared several providers to determine the best companies for AD&D coverage.

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Ensure you are getting the best rate for your insurance. Compare quotes from the top insurance companies.

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Does AD&D Insurance Cover COVID-19?

Although the global COVID-19 pandemic was an unforeseen event, it still isn't included in the list of scenarios that accidental death and dismemberment insurance covers. However, you may make a case for it if you are unable to work after contracting it. Life insurance policies, in comparison, cover COVID-19 death and pay the death benefit to beneficiaries. MoneyGeek's COVID-19 guide can help you develop strategies to improve or maintain your financial health should the illness affect it.

Frequently Asked Questions

Deciding between death insurance vs. life insurance requires a lot of thought. Here are some of the most commonly asked questions about AD&D and life insurance to help you.

About the Author


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Mark Fitzpatrick is a senior content manager with MoneyGeek specializing in insurance. Mark has years of experience analyzing the insurance market and creating original research and content. He graduated from Boston College with a Bachelor of Arts and Johns Hopkins University with a Master of Arts.


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