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 for Accidental Death and Dismemberment Insurance, is different from every other life insurance policy. You must know the difference between AD&D and life insurance.
If you have been in search of insurance to protect 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 accidental death and dismemberment insurance, generally known as AD&D. These two insurances may sound alike, but they are different from one another.
These policies 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 type of insurance that pays a death benefit to insured beneficiaries after the policyholder passes away. It provides up-to-date premiums. Most times, beneficiaries do not need to pay taxes on death benefits. However, life insurance has two common types of insurance policies.
These types of life insurance policies are term life and permanent life insurance policies. A term life insurance policy covers 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, offers coverage to policyholders for their entire lifetime as long as they continue to pay premiums. This policy offers 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 a policyholder dies or gets injured. They offer coverage if the insured has an insurance policy that covers these circumstances.
This insurance protects against accidental incidents. This includes car accidents and injuries, which may lead to catastrophic consequences like amputation, or loss of vital senses such as sight, speech, or hearing. While we have this, AD&D insurance does not offer coverage for death. Or injury as a result of overdose, suicide, natural causes, illness, or high-risk activities. Also, it 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 in that they both offer benefits to beneficiaries after a policyholder passes away. However, the events in which these insurance policies make payments 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 due to diabetes, heart attack, cancer, Alzheimer’s, stroke, and other illnesses | No | Yes |
| Death by murder | Yes | Yes |
| Death by plane accident | Yes | Yes |
| Death caused 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 differ 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 them and what you want them to cover.
Should you Buy AD&D or Life Insurance?
Although AD&D and life insurance are both forms of life insurance, they offer different types of protection and do not substitute for each other. Due to AD&D’s restrictive coverage, it may not be the best choice for those looking to secure a growing family or 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 traditional life insurance 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?
To enhance your life insurance coverage, consider adding AD&D insurance, which provides specialized protection in the event of accidental injuries or death, offering peace of mind and additional financial protection. You can also decide to purchase both life insurance and AD&D, either from the same insurance company or a different one, to get wider coverage.