Accidental Death & Dismemberment
Insurance, accidental death, disability & dismemberment FAQ's, things you need to know......
Do you need it?
Yes? This is a very low cost insurance product.
Will it pay off?
Yes? You have coverage from $100,000 to $1,000,000 for this low cost.
Can it hurt to have it?
But the odds are not in your favor! There are TONS OF EXCLUSIONS that make this product NOT the wisest choice of insurance to protect you and your family!
Many of these accidental death and disability policies (which are known as AD&D policies) are sold by direct marketing companies working for large retail companies and promoting the high benefit amount for a low monthly premium.
In fact the premium is so low - in many cases only $7 to $10 per month- that the consumer THINKS they are getting a real bargain, especially if they currently don’t have any Life Insurance coverage.
This is very misleading to the consumer because the ONLY way these policies will pay off at the Face Amount on the policy ($1,000,000 as an example) is if you die as a result of being a paid passenger on a common carrier such as a Bus, Train or Airplane.
Die any other way and the amount that the policy pays your beneficiary will be significantly less than the Face Amount which is what you thought you bought.
If an Auto accident or a Fall caused the death, the Face Amount would NOT be paid. In these cases, the Auto death benefit would most likely be reduced by the insurance company to a maximum of $100,000 (on a $1,000,000 Face Amount policy), while a death from a Fall would reduce the benefit paid to just $50,000 (from a $1,000,000 Face Amount policy).
If the insured dies from Natural Causes, such as Heart Disease or Cancer, the Beneficiary will get NOTHING!
The following are the Leading causes of death in the United States.
Keep in mind that statistically this is what the insurance companies rely on:
- Heart Disease - 31.4%
- Cancer - 23.0%
- Stroke - 6.9%
- Lung Disease - 4.7%
- Accidents - 4.1%
As you can see, the odds are that you will NOT die in an Accident.
You might be better off taking that $10 per month which you would have spent on this AD&D Policy (this amounts to $120 per year) then adding a little more to it and purchasing an inexpensive Term Life Insurance Policy or Disability Policy that will provide you with coverage for ALL causes of death and disability.
Source of statistics: Centers for Disease Control and Prevention