When Does AD&D Coverage Apply?
AD&D insurance is a general no-fault policy. Unlike a personal injury lawsuit, auto insurance claim or workers compensation, you don't need to prove that anyone was at fault for hurting you or that the accident was work related.
In addition, AD&D coverage is typically a double indemnity policy. This means that the amount you receive is not reduced by payments you receive from other insurance policies or court claims.
What Does AD&D Insurance Cover?
AD&D insurance covers exactly what its name suggests. It covers death or dismemberment resulting from a serious accident.
Dismemberment includes permanent loss of body functions such as losing sight, losing a limb, or suffering permanent paralysis.
What Are the Coverage Limits?
The coverage limits depend on the amount of coverage you purchase. A death claim generally results in receiving the full amount of the policy. A dismemberment claim will result in a fractional portion of the coverage limit depending on the severity of the injuries.
AD&D policies are effective for only defined lengths of time. To continue coverage, you will need to renew the policy and pay the current premium.
As you age, the coverage limits will typically drop. For example, the coverage may be cut in half once you reach 70. Your premiums may also drop, or you may decide you no longer need coverage if you're no longer working and supporting your family.
Are There Exclusions?
Yes, AD&D is a specific type of coverage, so there are exclusions. The name "accidental" literally means injuries that resulted from an accident.
Illness, suicide and natural causes are usually not covered under the policy. Other high-risk activities, such as injuries suffered while under the influence of drugs or alcohol, may also be excluded.
Is AD&D Coverage an Investment?
Unlike some types of life insurance coverage, AD&D insurance is not an investment vehicle. You can only receive cash from the policy if you have a claim resulting from an accident. You can't cash out the policy, and no money is due to you at the end of the term.
The benefit to you is that your premiums will be much lower. Remember that investment-type policies are only investing the money that you pay in.
Does AD&D Coverage Replace My Other Insurance?
AD&D coverage may duplicate or replace some of your other insurance coverage, but it isn't an all-in-one policy. You may still need different types of coverage for claims not covered by an AD&D policy or because you need higher limits.
Talk to your financial advisor about how to ensure that you're fully covered without duplicating coverage and paying more than you need to.
Get $2,000 of Free Coverage
TDECU members are eligible to sign up for $2,000 in free AD&D coverage as a benefit of being a member. All you need to do is fill out the enrollment form.
You're also eligible to purchase up to $300,000 in additional coverage with no qualifications other than being a member. That means no medical questions or health exams.
To learn more or if you need help, contact us for assistance.