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How are accidental death and life insurance different?

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It’s a cliche to say that accidents will happen, but it’s a cliche because it’s true. Prior to COVID, accidents were the third-leading cause of death in the United States, trailing only heart disease and cancer.

As a result, you might think it makes sense to get accidental death and dismemberment insurance. But it turns out that’s not necessarily the case, especially when compared to the cost and value of life insurance.

To explain the differences, and why you might want one or the other (or potentially both), we’ve broken them down below.

What is accidental death and dismemberment insurance?

Accidental death and dismemberment (AD&D) insurance is, true to its name, insurance that covers you if you die or are severely injured in an accident. AD&D policies typically specify what kinds of accidents are covered, and what kind of injury or dismemberment is included in your coverage.

What accidental death and dismemberment insurance covers

Accidental death and dismemberment insurance plans can — but don’t always — cover accidental death from:

  • Car crashes
  • Airplane crashes
  • Other vehicle accidents
  • Firearm accidents
  • Workplace accidents
  • Fire-related accidents

AD&D insurance often also covers the following, if they result from an accident listed above:

  • Loss of limbs
  • Loss of eyesight
  • Permanent paralysis

What accidental death insurance doesn’t cover

The nature of insurance is that insured persons pay money into a pool, and that pool is used in turn to pay money to any insured person who experiences a hardship, such as death or dismemberment.

Underlying that transaction is the idea of risk — actuaries estimate how likely something is to happen, to make sure there’s enough money to cover a policy claim.

With accidental death and dismemberment insurance, the idea is to provide coverage for you in case something unexpected were to happen. (There might be exceptions for especially high-risk activities, like skydiving, or accidents you cause through impairment from drugs or alcohol. You’ll want to check your policy.)

And as you might expect from the word “accidental” (it’s right there in the name!), it doesn’t cover death or dismemberment due to non-accidents, such as illness or disease.

One other thing to consider: Many accidental death policies are limited to $500,000 in coverage, far less than you can typically get from life insurance.

What does accidental death cost?

Accidental death insurance is generally pretty affordable, especially when compared to something like permanent life insurance. As an example, the insurance Fabric estimates that a 30-year-old woman in excellent health can get a 30-year, $500,000 accidental death policy starting at $26.45 per month.

But it’s important to consider what you get for your buck. You’ll be covered in case of an accident, yes. But your loved ones won’t receive a payout if you were to die from considerably more common causes (like heart disease, including heart attacks, or cancer), or less-common (but still prevalent) causes like Alzheimer’s or a stroke.

In fact, the CDC reports that only 6% of deaths are caused by accident — leaving your loved ones vulnerable if you die from one of the other 94% of causes.

Who needs accidental death insurance?

Because of these limitations, it’s often best to think of accidental death insurance as a supplement to a life insurance policy. (More on life insurance below.)

Accidental death insurance might also be a good choice for someone who is unable to qualify for a life insurance policy, due to their health. It might also make sense if you cannot afford a life insurance policy, though it’s worth noting that a term life insurance policy is often roughly as affordable as AD&D, especially if you are young and relatively healthy.

What is life insurance?

Traditional life insurance is insurance coverage that offers a payout (or death benefit) to your loved ones in the event that you die. There are several types of life insurance (including permanent insurance, such as whole life insurance), with term life insurance often being the most affordable.

With term life insurance, you buy a policy with a term that  lasts between 10 and 30 years, and if you die during the term, your beneficiaries receive a payout equal to the value of your policy. If you don’t die, your policy expires, and you can rejoice in having outlived your term.

What life insurance covers

Notably, a term life insurance policy covers your death for essentially any cause. This is in contrast to accidental death insurance, which only covers death from a covered accident.

What life insurance doesn’t cover

Not much, actually. The main thing is to be honest during your application. If you are found to have lied during that process — by hiding an illness, for example, or a smoking habit — you will risk non-payment of the death benefit.

There is also a period, typically two years, called the contestability period.

If you die during that time, the insurer might review your death to make sure it didn’t stem from something you hid during your application. Committing suicide during the contestabilty period might also result in the non-payment of your death benefit. (If you are having suicidal thoughts, dial 988 or visit to get help.)

What does life insurance cost?

In general, term life insurance is the most affordable type of life insurance. It’s intended to cover the years when you’re earning money and covering the expenses of a dependent (think: your kids) or paying off a large expense like a mortgage.

Policyholders typically plan for their term to expire after the kids move out and the mortgage is paid off. Because these years tend to be when you’re younger and healthier, the cost of insurance is generally lower.

For example, that same 30-year-old woman in excellent health we mentioned above can get a 30-year, $500,000 term life insurance policy from Haven Life starting at $24.40 per month — a dollar less than comparable AD&D coverage ($360 less over the life of the policy), and it covers you for a wider range of causes of death.

Another advantage to term life insurance is that the coverage limit is generally higher — at Haven Life, you can buy a policy worth up to $3 million. Generally, experts recommend a policy worth 5 to 10 times your annual salary, which means a $500,000 policy — the typical AD&D cap — might not be enough.

Here are some examples of what someone in excellent health might pay for a Haven Term policy, issued by MassMutual or its subsidiary, C.M. Life:

Age Gender Policy length Coverage amount Monthly Premium
25 Male 30 years $250,000 $17.49
25 Female 30 years $400,000 $19.55
35 Male 20 years $500,000 $20.72
35 Female 20 years $600,000 $19.75
45 Male 15 years $750,000 $50.62
45 Female 15 years $1,000,000 $49.40
Estimates based on pricing for eligible Haven Term applicants in excellent health. Pricing differences will vary based on ages, health status, coverage amount and term length. These prices do not reflect the rates for applicants in DE, FL, ND, NY and SD.

Can you have both?

Good question. It’s true, they’re not mutually exclusive — you can have life insurance and accidental death and dismemberment insurance.

But for many people, owning both policies is redundant, given that life insurance coverage includes deaths caused by an accident. (For some people, it’s the second “D” in AD&D that compels them to carry both types of policy: Dismemberment, which is not typically covered by a life insurance policy.)

Many life insurers offer AD&D as a rider, meaning you can pay to add this coverage to your life insurance policy. (Haven Life does not offer this at this time.)

Find the right insurance for your needs

Finding the right life insurance plan doesn’t have to be complicated. At Haven Life, our online application process means you can apply — and potentially be approved for coverage — during your lunch break.

Start by getting an online quote today.


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