Offer AD&D as a Basic Voluntary Coverage

Accidental death and dismemberment insurance policies are most commonly offered as a voluntary employee supplement to a life insurance policy. Depending on how your benefit program is set up – and your decision as an employer regarding what you’d like to make available to your employees – you have the option of making available either a separate policy, or an AD&D rider to an existing life insurance plan.

 

AD&D takes advantage of “double indemnity.” If your employee has an existing life insurance policy and an AD&D policy and dies because of a covered accident, his or her beneficiary is entitled to payouts from both policies. Thus, if the AD&D policy is set up as a rider to life insurance, the policy benefit doubles. (If it’s set up separately, the payout from the AD&D policy would be whatever coverage protection is contractually agreed upon in the plan.)

 

Accidental deaths are not common. According to the Centros para el Control y la Prevención de Enfermedades, they are the fourth-most likely cause of death in the U.S. – about 45 per 100,000 per year. Because the events that give rise to an AD&D claim are fairly rare, these policies tend to very affordable, usually costing a lot less than a life insurance policy with a similar payout.