What does an accidental death insurance plan mean?

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Insurance is designed to provide financial relief in the event of catastrophe. Coverage for accidental death and dismemberment, or AD&D, provides an extra layer of insurance in case of the unexpected.

Identification

Accidental death typically comes packaged with dismemberment protection. AD&D insurance pays benefits to beneficiaries when death was due to accident. Coverage also includes a payment schedule for severed limbs and paralysis, and for the loss of sight and hearing.

Benefits

AD&D insurance supplements life insurance benefits in the event of death. In the case of dismemberment, AD&D payouts are designed to compensate for losses in income related to the trauma.

Considerations

AD&D insurance coverage can often be bought as part of group benefits through your employer. People who travel frequently typically prefer AD&D policies to mitigate the risks of plane and automobile crashes.

Misconceptions

AD&D insurance does not cover natural death or suicide.

Risks

Work to understand the specifics of your AD&D policy before committing to pay premiums. Some insurance policies might not cover accidents related to work or to risky sports, such as skydiving.

Source:

NAIC: Travel Insurance

Investopedia: Life Insurance

Investopedia: Accidental Death and Dismemberment Insurance

More Information:

NAIC: Glossary of Insurance Terms

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What does an accidental death insurance plan mean?

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