Accidental Death Insurance On Top Of Life Insurance: Coverage Differences

Recently, I got an upsell from my life insurance carrier offering $500,000 in accidental death insurance for $33 a month. This is on top of my existing 20-year term life insurance policy coverage of $750,000 I found through PolicyGenius, a free life insurance marketplace.

The accidental death insurance offer sounded like repetitive coverage. But I was interested in learning more since I actually wanted to get at least a $1 million term life insurance policy until my kids are adults, but couldn't. $750,000 was the most SBLI was willing to cover without a medical exam. And I didn't want to draw blood.

If I got an accidental death insurance policy, I would then have $1,250,000 in total coverage for accidental death. This is different from receiving $1,250,000 in total life insurance coverage.

Is accidental death insurance necessary on top of regular life insurance coverage? I had to investigate further and understand the difference.

Accidental death insurance example

What Is Accidental Death Insurance?

Accidental death insurance, also called accidental death and dismemberment insurance (AD&D), covers death from accidents. But it doesn't cover death from natural causes like old age or illness.

AD&D insurance also pays out part of the benefit in some instances of injury or accidental loss of limbs, hence the word dismemberment.

To clarify the differences in what life insurance and accidental death insurance covers, here's a great chart from PolicyGenius comparing the two.

Life Insurance Versus Accidental Death & Dismemberment Coverage Comparison

Life Insurance Versus Accidental Death & Dismemberment Coverage Comparison

The premiums are based off a 35-year-old non-smoking male with a Preferred health rating buying a $500,000, 20-year term life insurance policy based on a composite of policies offered by Policygenius.

What Accidental Death Insurance Won't Pay For

As you can see from the comparison chart, accidental death and dismemberment insurance won't pay out for:

  • Death by natural causes, sickness, or disease
  • Death by drug overdose
  • Or death by suicide

I'm surprised the chart says term life insurance will pay out for death by suicide though. You had better double check with your life insurance carrier before doing anything you regret. You need a certain amount of time to pass after you take out your life insurance policy before suicide can be covered.

What Accidental Death Insurance Will Pay For

The only types of death in which an accidental death insurance policy will pay out are:

  • Death by accident (car crash, plane crash, boat crash, etc)
  • Death by murder
  • Loss of limb, sight, hearing, or speech

Insurance That Covers The Types Of Death You're Most Afraid Of

Upon comparing the two types of insurance policies, it seems the types of deaths accidental death insurance covers are probably the ones many of us fear most.

My biggest death-related concern is dying suddenly in an airplane or car crash, where there is no chance of survival. Before every family road trip, I inspect the car and stock up on some caffeinated drinks so I don't nod off. And before every takeoff, I make sure to call and text my loved ones just in case.

I'm not concerned with getting murdered because I live in a relatively safe place. Further, I don't piss people off, don't look rich, and know self defense. But it's nice to know that accidental death insurance will pay out if this were to happen.

I don't plan to commit suicide or die by drug overdose, so I'm not afraid of these types of deaths. Therefore, accidental life insurance not covering these two items is no big deal.

Finally, dying by natural causes is the most pleasant way to die. Getting sick or contracting a disease is terrible but a part of life. Thanks to modern medicine, there's always some chance of surviving an illness or at least prolonging life. Therefore, I'm not as concerned as accidental death insurance doesn't cover these types of deaths.

It's really the unexpected and sudden types of deaths I worry most about, which is why accidental death insurance is attractive. If you are a planner, you likely feel the same way.

Is Accidental Death Insurance On Top Of Life Insurance Worth It?

Based on the types of deaths I fear most, I'm leaning towards getting an accidental death insurance policy as well. There's always hope of recovering from a grave illness. But when a death is by accident, that's it.

My ideal life insurance coverage was short by $250,000. Therefore, getting an accidental death insurance policy for $250,000 would top me up to $1 million in accidental death coverage. The cost will be less than $20 a month and I can cancel it at any time. Or I can just pay $33 a month for the full $500,000 offer.

I like how being pre-approved means there are no medical exams, no health questions, and no hassles. Having life insurance until both my kids turn 20 feels good to me. And if I don't feel the need to have the coverage anymore, I can just cancel.

Downsides To Accidental Death Insurance

There may be one downside to getting accidental death insurance other than paying more premiums. The insurance carrier might contest the legitimacy of an accidental death in order to not pay out.

In other words, some people might try to fake an accidental death when it was actually a suicide. These incidents are probably very rare, but they may make collecting the payout slightly more difficult for legitimate cases.

There's Always A Solution To Your Life Insurance Needs

What I realized on my path to insuring my family is there's always a solution to getting what you need.

I didn't think I could get affordable coverage 10 years after getting my first policy due to a sleep apnea diagnosis. But I checked online with Policygenius and found SBLI that was willing to cover me at an affordable rate.

As I didn't want to do a medical exam, I agreed to its limit of $750,000 instead of $1 million. $750,000 was better than nothing as my $1 million, 10-year term policy was expiring.

Then for six months I thought I was stuck with a $750,000 life insurance policy until I got this pre-approved accidental death insurance offer.

This is an example of how capitalism can be beneficial. SBLI probably has some internal metric that says if I pay my life insurance premiums on time for six months in a row, they will send me a new offer. And I can accept or decline based on my needs.

If you find yourself dissatisfied with your life insurance coverage or any type of coverage, keep searching. More likely than not there is a company out there willing to provide what you need at a reasonable price.

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18 thoughts on “Accidental Death Insurance On Top Of Life Insurance: Coverage Differences”

  1. Ms. Conviviality

    Once again, the blog comes through to answer a random question for me. This article was very helpful.

  2. Early in my work history I did marketing for an insurance firm. It was well known within the firm that AD & D as well as cancer insurance and mortgage insurance policies are scams. The terms and conditions was pages long and our internal meetings were basically target marketing to low educated and seniors. I got out of there as soon as I could because I felt like I had to scrub my skin with a Brillo after 5 pm.

  3. Jeremy Schuster

    Hi,
    I have some questions for you re: these ad&d payment claims. How they pay and what is their payout scale. A be finger is worth x where a hand might be worth 10x.

    I don’t sell insurance but have a bit of experience in working to streamline our family plan. Happy to share my experience with you by phone if you are inclined. Our call would last less than 15 minutes. I am currently living in France and can call the states for free. My email and contact details are below for your easy reference.

  4. Be careful on AD/D fine print. We recently tried to make a claim with Aflac after hit by car but they have a common carrier language. Basically only covers if said claimant was a passenger at the time and a common carrier is limited to “only an airplane, train, bus, trolley, or boat that is duly licensed by a proper authority to transport persons for a fee, holds itself out as a public conveyance, and is operating on a posted regularly scheduled basis between predetermined points or cities at the time of the accident.”

    1. Kai, to clarify, did someone die? I hope not. And if not, then AD&D wouldn’t pay out right?

      Thanks for the warning on fine print. Need to ask the carrier about different scenarios then.

      Bummer there seems to be all these outs for the carriers not to pay.

      1. Yes unfortunately. They denied claim for the higher payout due to common carrier language and classify as other which pays the least. Aflac is the only one with that exact language to my knowledge. So stay away from them

  5. Hospitalist

    The fine prints on this insurance product makes it a lot less desirable, unfortunately most people don’t find out about this until accidents happen. It is a lot better to add another cheap term life insurance, you are either dead or alive, it’s either black or white, no mess no fuss.

  6. Regarding suicide claims on term life – it does exist but typically there is a certain period that has to pass after the policy starts before a beneficiary can collect for death due to suicide. There’s a technical name for it, but I can’t think of it at the moment. The time frame that has to pass is usually about 1 year, but might be 2 years depending on the issuer and individual policy. It’s part of the fine print in a policy.

    I have a small AD&D life insurance rider on my health insurance policy. It’s small though like $25k I think, but only costs a few dollars a month so I chose to add it. Very interesting on the comments notating the specifics on claim eligibility. I could see how that would be very frustrating to deal with during the claims process.

  7. AD&D has a lot of very specific fine print. I remember a policy years ago that only paid if your died from the accident within 24 hours of the accident. so, if your hit by a car, scrapped up off the pavement and kept alive for 24 hours, then die – no life insurance payment for you.

    You get what you pay for. AD&D is cheap precisely because they don’t pay out a lot of claims. Skip the Ad&D add to your term and take a blood test.

      1. STEVEN J STEWART

        Sam,
        I had a convertible option to continue AD&D from job I retired from.
        $300,000 coverage for $10.50/month. I thought this was a cheap way to increase my estate for my wife if I got killed in a Motorcycle accident. This is my most risky behavior pre & post retirement but it’s what I want to do.
        I also read my policy exclusions and discovered they would not cover aviation type accidents. I may still pursue a private pilots license to add a little more adrenalin to retirement activities. I really think flying would be allot safer than riding a Harley based on my riding experience (~170,000 miles since 2006)

          1. Should check if it really covers car deaths and in what context. Using Aflac AD&D policy as a basis – they don’t even count car related accidental deaths in their Accidental death payout.

            There’s a case regarding a widow sueing Aflac bc her husband died as a passenger in a helicopter and Aflac denied her the higher payout bc they claim a helicopter is not a plane per their common carrier fine print. Court rule in widow favor but Aflac appeal and currently in limbo (https://www.leagle.com/decision/infco20090928114)

  8. I follow Linde Nee of DSC Claims solutions who writes a lot about battles with disability insurance. She had a post recently suggesting that accidental death insurance isn’t worth it because the company will try to fight whether it was accidental or not. She said with regular life insurance, they can’t do that. Accidental insurance makes money because of fear. Therefore, would not recommend it.

    1. Interesting! I wonder if Linde is jaded because that’s all the person sees, insurance claim battles?

      But definitely something good to consider, because for most people, we would assume that life insurance claims pay out because of the finality of the event. But accidents can be debated, and therefore, should be considered and carefully modeled when doing a cost benefit analysis.

      But here’s the thing. If you die in an airplane crash or car crash, that is an accident. Whether it’s your fault or someone else’s fault. What is the scenario where this could be debated?

      I guess creating a fake accident, when it was really suicide right?

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