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

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Updated: Sep 29, 2023
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Accidental death and dismemberment (AD&D) and life insurance are financial products that provide coverage, yet they differ in scope and cost. AD&D protects against death and dismemberment caused by accidents. Life insurance offers a broader safety net, including death from natural causes and illnesses. Understanding the distinctions between these two can guide you in tailoring your insurance portfolio to your unique needs and circumstances.

Table of Contents

Difference Between AD&D Insurance & 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 will enable 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.

Accidental death and dismemberment insurance also pays out a death benefit. However, insurers 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
Life Insurance
AD&D Insurance

Cash Value

Some 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

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 provides a death benefit.
However, as its name implies, it only
covers deaths resulting from an

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.


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

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
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?

In terms of cost, 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 influenced by your age, life insurance's broader coverage is the primary reason for the difference in cost.

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

Compared to AD&D insurance, life insurance is often the better choice. Life insurance typically covers a broader range of circumstances and is particularly advantageous for estate planning.

How AD&D Insurance Works

AD&D insurance provides financial protection in the event of accidental death or certain types of severe injuries. These often include the loss of a limb, eyesight, speech or hearing. Unlike traditional life insurance, AD&D does not offer coverage for death resulting from natural causes, illnesses or any pre-existing medical conditions.

Accidental Death

Accidental death coverage is a core component of an AD&D insurance policy. It comes into play when the insured individual dies due to an unexpected accident, such as a vehicular collision, a fall or other sudden events. In such cases, the beneficiary receives a lump-sum payment, typically equal to the face value of the policy. This financial payout aims to provide immediate financial relief to the beneficiary, helping to cover funeral costs, settle debts or sustain living expenses.

AD&D policies often have a list of conditions and exclusions that can affect the payout. For instance, deaths resulting from high-risk activities like paragliding or bungee jumping may not be covered. Similarly, deaths due to substance abuse or occurring under the influence of alcohol are generally excluded. Some policies also have time limitations, specifying that the accidental death must occur within a certain period following the accident to be eligible for the payout.

Accidental Dismemberment

Accidental dismemberment is another key feature of an AD&D policy. This coverage is activated when the insured individual experiences a severe injury that results in losing a limb, eyesight, hearing or other vital bodily functions. Unlike the accidental death component, which usually pays out the full face value of the policy, the accidental dismemberment payout is often a percentage of that amount. The specific percentage depends on the type and severity of the loss. For example, losing one arm might result in a 50% payout, while losing both arms could trigger a 100% payout.

Exclusions often apply, such as injuries sustained while engaging in high-risk activities or those that result from substance use. Additionally, some policies specify a time frame for the loss to occur post-accident for the payout to be valid.

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 cannot work after contracting it. Life insurance policies, in comparison, cover COVID-19 deaths 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.

How Life Insurance Works

Life insurance is a more comprehensive form of coverage that pays out a predetermined sum to the beneficiaries upon the insured's death, regardless of the cause. This can include natural death, illness or accidents.

This lump-sum payment is versatile and can be used by the beneficiaries for various financial needs. It can help cover immediate expenses like funeral costs, settle outstanding debts or even act as an income replacement to maintain the household's standard of living. Beneficiaries might also use it for long-term financial goals, such as funding educational endeavors or paying off a mortgage.

Life insurance policies come with different options and riders, like term life, whole life and universal life, each with its own set of features and benefits. Understanding the different types of life insurance and their respective advantages can help you tailor a policy that best suits your financial planning objectives.

Life Insurance vs. AD&D Insurance Coverage
Life Insurance
AD&D Insurance

Death From Illness



Death From Disease



Death From Drug Overdose



Death From Homicide



Death From Suicide



Death From Car Crashes



Death From Choking



Death From Drowning



Death From Slipping



Death From Falling



Loss of Eyesight



Loss of Hearing



Loss of One or Multiple Limbs



Loss of Speech



Partial or Permanent Paralysis



*Most life insurance policies cover death by suicide, 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 deaths, AD&D insurance only covers deaths and injuries caused by accidents.

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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 both accidental death and dismemberment coverage and life insurance can help with your decision.

Pros & Cons of AD&D Insurance

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  • 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)
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  • 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

Pros & Cons of Life Insurance

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  • Covers a wide range of circumstances, including natural death, illness and accidents
  • The lump sum payout can be used for various financial needs
  • Can be tailored to meet specific financial goals
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  • Premiums can be high, depending on policy type and coverage.
  • Potential for coverage lapse due to unpaid premiums or term expiration
  • Limited immediate utility/benefits since payouts only happen upon the insured’s death

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.

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, we recommend shopping around before deciding on a provider. Some insurers offer a separate policy, while others only have riders that they provide with life insurance. MoneyGeek compared several providers to determine the best companies for AD&D coverage.

How to Get AD&D Insurance

Acquiring AD&D Insurance is a straightforward process, but knowing the different avenues for obtaining it is essential. Each option has distinct advantages and limitations that you should consider. By understanding your options, you can make an informed decision that aligns with your financial goals and risk profile.

As a Rider

Adding AD&D coverage as a rider to an existing life insurance policy is a convenient way to enhance your coverage. This option allows you to manage both types of insurance under one umbrella, simplifying the administrative process. However, it may limit customization options for the AD&D portion.

As a Standalone Policy

Opting for AD&D as a separate policy offers greater flexibility in customizing the terms and conditions to fit your specific needs. This route may also provide higher coverage limits, but it does mean managing another separate policy.

As Part of Group Life Insurance

Many employers offer AD&D Insurance as part of their group life insurance benefits. This is often the most cost-effective way to obtain coverage. However, the policy terms are generally standardized, offering less room for customization. Additionally, coverage may lapse if you change employers.

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Frequently Asked Questions About AD&D and Life Insurance

Deciding between death insurance and 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 make an informed decision.

About Mark Fitzpatrick

Mark Fitzpatrick headshot

Mark Fitzpatrick is a senior content director at MoneyGeek with over five years of experience analyzing the insurance market, conducting original research and creating content that can be personalized for every buyer. He has been quoted on insurance topics in several publications, including CNBC, NBC News and Mashable.

Mark earned a master’s degree in Economics and International Relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his economics and insurance knowledge to bring transparency around financial topics and help others feel confident in their money moves.