Employees love accidental death and dismemberment coverage because it addresses a real need, is inexpensive and promises to take care of them (and their family) in case of accidental death. Whether packaged as a standalone group product or as a rider to a voluntary universal or term life policy, this coverage type will likely retain its popularity.
Accidental death and dismemberment coverage seems as ubiquitous as sand in the desert. Consumers see it everywhere, often without knowing exactly what it is. Banks offer it in statements, it has been given away at benefit enrollments, and rumor has it that is handed out at state fairs along with funnel cakes. This cheap orgy of AD&D begs the question: Does accidental death and dismemberment add any value to a client's financial health and insurance needs?
Most insurance professionals would argue quite strongly that it does. Perhaps the most common use of AD&D is as a rider to various life insurance policies.
Recommended For You
Adding AD&D to a term policy, while sometimes an afterthought, is a way to provide some additional coverage to a policyholder for very a minimal cost. Frequently it's used to provide double indemnity in the event of a death by accident, and sometimes triple indemnity if that death occurs on a common carrier, such as a commercial airline or passenger train. Double indemnity, when explained, is a popular policy feature, especially when coupled with receiving cash if one loses an arm, a leg, an eye or a combination of these.
Though it has substantial popularity when marketed, and in practice when exercised, it's not overly utilized. This means that insurance carriers can keep the cost relatively low for each individual while still increasing overall premium on a group. It may cost a policyholder $2.50 a month on a $50,000 voluntary group term policy, which certainly would be classified as affordable by most employees.
There are questions of how much value an AD&D rider actually adds to a policy, or how much an AD&D policy really is necessary. The age-old insurance maxim that no policy has value unless what it covers happens to you applies here. The wife and children whose father was killed in an automobile accident and received $100,000 from an accidental death rider undoubtedly believe that it was worth $30 a year for that additional $50,000 of accidental coverage.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
