Life Insurance vs. Accidental Death & Dismemberment Insurance

AD&D insurance covers accidenal death and some injuries but isn't a replacement for life insurance.

Colin Lalley 1600

Colin Lalley

Published March 20, 2020


  • Accidental death and dismemberment insurance does not cover death from natural causes

  • Life insurance offers more coverage for a comparable price

  • AD&D should never be a substitute for term life insurance

What’s the difference between life insurance and AD&D?

Life insurance provides financial protection for your family in most cases of death and will pay out if you die by accident or illness. Accidental death and dismemberment (AD&D) insurance only pays out in certain instances of death by accident, but not for natural causes or illness. It also provides benefits for some non-death accidents.

Life insurance and AD&D insurance cover similar instances of death, but it’s important to know the difference between life insurance and AD&D to understand when AD&D coverage may not protect you.

In this article:


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AD&D vs life insurance: Coverage comparison and differences

AD&D InsuranceLife Insurance
Death by natural causes, sickness, or disease (heart attack, cancer)NoYes
Death by accident (car crash, airplane crash)YesYes
Death by drug overdoseNoYes
Death by suicideNoYes***
Death by murderYesYes
Loss of limb, sight, hearing, or speechYesNo

* Term life insurance policy only.
** Sample rates for $500,000, 30-year-term policies for a healthy 35-year-old.
*** Unless during first two years of coverage.

Note that AD&D insurance has some exclusions, including injuries sustained before coverage and death while participating in riots. Each state may have its own exclusions for what AD&D insurance will cover.

Life insurance basics

Life insurance provides financial benefit if the policyholder dies. Premiums are paid on a monthly or annual basis, and the death benefit is paid out to named beneficiaries. Life insurance helps breadwinners provide for loved ones who rely on their income.

The most common types of life insurance are:

  • Term life insurance – Expires after a number of years outlined in the policy.
  • Whole life insurance – A type of permanent life insurance; remains active as long as premiums are paid, and contains an investment-style cash value.

A term life insurance policy is the best option for most shoppers, because it’s affordable and straightforward.

Learn more about the differences between term and whole life insurance.

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Pros of life insurance

Life insurance is a good option for anyone who has people who rely on their income to pay off debts, make ends meet for everyday expenses, and plan for the future.

  • Provides no-strings-attached, tax-free death benefit in most cases
  • Cost-effective compared to other forms of financial protection

Cons of life insurance

While life insurance is a smart purchase for most people, there are some instances when it’s not right.

  • Can be cost-prohibitive for older or unhealthy people
  • Whole life insurance is a poor investment option

Accidental death and dismemberment (AD&D) insurance basics

As the name implies, and AD&D policy covers death from accidents. That means it doesn't cover death from natural causes like old age, or deaths from terminal illnesses.

AD&D insurance will also pay out in some instances of injury. While the full payout will come if you're killed in an accident, an accident resulting in injury may only pay out a portion of the benefit. Your policy will outline what portion of the benefit you'll receive for which injuries.

Pros of AD&D insurance

Accidental death and dismemberment insurance isn’t as important as other types of insurance, but still has a place for some financial protection plans:

  • Provides additional peace of mind in conjunction with a life insurance or disability insurance policy.

Cons of AD&D insurance

  • Offers limited coverage
  • Poor substitute for proper life insurance
  • More common as a rider than a standalone policy

Do you need AD&D insurance if you have life insurance?

Some insurance brokers try to push accidental death and dismemberment insurance as a substitute for life insurance, especially for young shoppers; since young people are more likely to die from accident than from illness or natural causes, the argument is that AD&D insurance is the smarter buy.

However, AD&D insurance is not a substitute for life insurance. Part of life insurance is planning for the future; a 30-year-old may not need a $500,000 life insurance policy today, but they lock in their price for the term of the policy. What someone pays today is what they’ll pay in 20 years when they’re more likely to need life insurance.

Meanwhile, if you rely on AD&D insurance for 20 years, you’ll need to buy a life insurance policy when you’re older. Since life insurance gets more expensive as you age, you’ll end up paying much more for the policy.

Add that to the fact that life insurance covers more instances of death than AD&D insurance, for a comparable or cheaper price, and it’s clear that life insurance is the more valuable policy.

Accidental death and dismemberment riders

For someone who wants both life insurance and AD&D insurance, a rider is a viable option.

A rider is an addendum to a policy that provides additional coverage. An AD&D rider pays out an extra amount if death is due to an accident; if the death is from natural causes, the policy simply pays out the base amount.

Ask an expert if the life insurance company you've chosen offers an AD&D rider.

Disability insurance

For shoppers who are more interested in coverage for the “dismemberment” portion of an AD&D policy, consider disability insurance. As with life insurance, AD&D insurance covers some of the same things as disability insurance, but a proper disability policy is more thorough and covers illness and temporary disabilities.