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 Centers for Disease Control and Prevention, 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.