Life insurance provides financial protection for your family and will pay out for any cause of death. Accidental death and dismemberment (AD&D) insurance, on the other hand, is designed specifically to only pay out for accidental death or accidental injury, such as loss of limb.
Life insurance and AD&D insurance overlap slightly, but for most people, it’s better to get life insurance coverage because it’s comparable in price and covers you in more scenarios.
Life insurance vs. AD&D: Coverage comparison
Circumstance | Term life insurance | AD&D insurance | Term life insurance with an AD&D rider |
|---|
Expires? | Yes | Yes | Yes |
Cost | $30.55 | $12.95 | $49.26 |
Death by natural causes, sickness, or disease | Yes | No | Yes |
Death by drug overdose | Yes | No | Yes |
Death by suicide | Yes | No | Yes |
Death by accident (car crash, airplane crash) | Yes | Yes | Yes |
Death by murder | Yes | Yes | Yes |
Loss of limb, sight, hearing, or speech | No | Yes | Yes |
Average monthly premiums for 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 from Corebridge Financial, Banner, Brighthouse, Lincoln, Mutual of Omaha, Pacific Life, Protective, Prudential, and Transamerica; a $500,000, 20-year term life insurance policy with an accidental death and dismemberment rider based on rates from four carriers offering that coverage through Policygenius, including Corebridge Financial, Mutual of Omaha, Prudential, and Transamerica; and a $500,000 accidental death and dismemberment policy issued by Mutual of Omaha. Referenced policies may vary by carrier. Not all policies are available in all states. Individual rates will vary as eligibility and availability will affect each customer’s rate. Rate illustration valid as of 03/01/2023.
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 covers all types of death — with a few exceptions. The more comprehensive coverage of life insurance versus AD&D insurance ensures that your loved ones will get financial support no matter how you die.
Additionally, life insurance gets costlier as you age, but if you buy life insurance when you’re young, you’ll be able to lock in lower rates for many years. Meanwhile, if you rely on AD&D insurance for 20 years and then decide to buy a life insurance policy when you’re older, you’ll pay much more for the policy.
Life insurance vs. AD&D: The basics
When comparing life insurance and AD&D, it’s helpful to understand the fundamentals of each type of coverage.
Life insurance
Life insurance provides financial protection to loved ones when you die. You pay premiums to keep your policy active and the death benefit goes to your named beneficiaries after you’re gone.
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 a savings-style cash value account
A term life insurance policy is the best option for most people looking to protect their income and provide their family with a financial safety net to cover any debts — including a mortgage or any other types of personal loans. It’s affordable and and comes with few rules and tax restrictions.
Whole life and other types of permanent life insurance are good options for people looking to use life insurance to diversify their investment portfolio or those with long-term financial obligations or coverage needs, like dependents who require lifelong care.
Accidental death and dismemberment (AD&D) insurance
An AD&D policy 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. Your policy will outline how much of the benefit you’ll receive for different types of injuries.
Supplemental life insurance vs. AD&D insurance
If you have life insurance through your employer, the coverage provided by your company may actually be AD&D insurance. Check your benefits paperwork or speak with a benefits administrator to confirm what causes of death are insured by your policy.
In this scenario, it makes sense to buy supplemental life insurance to ensure you’re fully protected. It’s best to supplement with a private life insurance policy because any policy you get from your employer won’t stay with you when you leave the company.
Do you need AD&D insurance if you have life insurance?
You don’t need AD&D insurance if you have life insurance, but it can be a good complement to your policy if you can afford it. An AD&D policy is a low-cost way to add some extra protection against unexpected injuries.
The most comprehensive income protection for injuries is a disability insurance policy. Disability insurance helps to protect your income if you are hurt or develop an illness that impacts your ability to earn an income.
The average 20-year-old today has a 13% chance of dying before retirement age, but a 25% chance of becoming disabled [1] . While getting AD&D insurance could be helpful, statistically disability insurance is a better supplement.
Accidental death and dismemberment riders
If you want both life insurance and AD&D insurance, a rider is a viable option. Riders are policy add-ons that offer supplemental coverage under special circumstances.
An AD&D rider — also known as a double-indemnity rider — pays out an extra amount if your death is accidental. If the death is from natural causes, your policy simply pays out the base amount.
Ask an expert about life insurance companies that offer an AD&D rider.
If you can only choose one kind of coverage, life insurance is the best choice because AD&D can leave you without protection if you die from natural causes, sickness, disease, drug overdose, or suicide.
For those looking for the most comprehensive protection, adding an AD&D rider to your life insurance policy is a better option than AD&D insurance alone.
Frequently asked questions
What's the difference between life insurance and AD&D insurance?
Life insurance pays a tax-free benefit to your beneficiaries if you die, whereas AD&D pays out to your beneficiaries if you die or are injured in a qualifying accident.
Do I need both life insurance and AD&D insurance?
Most people only need life insurance, which covers more causes of death than AD&D and is similarly affordable.
Is AD&D insurance worth buying?
Most people don’t need AD&D as a standalone policy. If you’d like some coverage for accidental injuries, an AD&D rider or standalone disability policy are better choices.
