What is the Difference Between Life insurance and Accidental Death and Dismemberment Insurance(ADD).

life insruance vs accidental death

We  have many customers who come to us under the impression that their Accidental Death Policy they purchased is an all cause life insurance, which it is not. A lot of people own these type of policies but are unaware of their limited payout. I personally blame the broker who sold the policy without properly educating the consumer on the big difference. There is more than few big agencies that sell these policies since it is easy to place and faster to get paid.

To understand the difference let’s define each type.

Life Insurance Policy

Is an agreement between you and the insurance company that promises to pay the listed beneficiaries a large sum of money in exchange for a premium in an event of death. Life insurance will cover all causes of death except for suicide(which can be contested in the first two years only). Regular life insurance policies will in most cases require a medical exam and underwriting which can take between 48 hours to a few weeks. There are how ever companies that offer no medical exam options with quicker underwriting.

Accidental Death and Dismemberment Policy(ADD).

The company will only pay out a lump sum in the event that you die due to an accident. Also there is a partial benefit payout for a loss of one or more limbs. Please be aware that if your death is due to an illness or natural death there will be no payout. This type of coverage can be acquired with no exam and no underwriting for same day effective date. Since this coverage is a limited form of life insurance the monthly premiums are reduced. Accidental death can be added as a rider to a traditional life insurance plan to pay out double death benefit in loss of life due to an accident(aka double indemnity).

Both types of plans have their place for consumers but the key is to be aware and not be misled. We typically only recommend an accidental coverage if a person can’t get anything else due to an uninsurable condition or to add to an existing term life insurance plan that they have. This is very important topic because it can be a difference between a child receiving a lump sum to not getting a dime because their parent passed away from an illness and not an accident.

Not sure what type of policy you need? Call us for any questions at 888-492-1967 or get an instant quote online.

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About Mack Dudayev

Mack is owner and life insurance expert at InsureChance. On a mission to create a way everyone can understand, afford and attain the right life insurance coverage to protect their financial responsibilities.

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Marilyn Nelson

Thank you very much. Your web site is the first one that I found that puts the definitions of the policies in simple terms that I can understand. I had an accidental life insurance policy through work and I was concerned about what type of coverage it provided. I tried to get an explanation from the company, but it was still not clear to me. Instinctually, I cancelled the account, but I was still not 100% sure of what I had done. Thank you for explaining the coverage so that now I do not have any regrets!

February 17, 2014 at 3:07 pm

    You are quite welcome!! It is a pet peeve of mine that many agents and companies fail to explain the difference on something as important as life insurance. Thank you for your feedback and if there are any other questions that you have please feel free to ask!

    February 17, 2014 at 3:51 pm
Alexandra Eyle

If I die from an accident, and have both Life and AD&D, will both policies pay?

October 17, 2015 at 2:02 pm

    Hey Alexandra,

    Yes, that is correct. If the death was due to an accident both plans will pay out.

    October 17, 2015 at 4:26 pm

So say I was in a car accident and passed away. Would my husband and children benefit from both my AD&D policy and my regular life insurance policy?

October 21, 2015 at 6:14 am

    Hi Sara,

    In a case of an accident both policies would pay out to your family.

    October 21, 2015 at 8:58 am

If i have a life insurance policy and i die of a natural cause will the insurance pay out?

January 7, 2016 at 10:49 am

    Hey Mystique,

    If you have a traditional term life insurance policy then the answer is yes! However, if you are referring to an accidental death policy, then it will not pay out to your family members. In many cases it’s best to buy a term life insurance policy since it would cover both accidental and natural causes.

    January 7, 2016 at 12:45 pm

Hello, what is a accidental death and whole life insurance policy?

July 21, 2016 at 4:33 am

    Hello Lorretta,

    An accidental death policy covers your family in the event of you passing in an accident only. A whole life policy covers you for all causes and provides lifetime protection with a savings element. Feel free to reach out to us for more information.

    July 29, 2016 at 6:07 pm

my policy covered under only natural death. do they pay me in case accidental death.

November 11, 2016 at 1:30 am


    Technically if you have an all-cause life insurance it should cover both natural death and accidental. Hope this answers your question, if not please call 888.492.1967 and we will be more than glad to give you more information.

    December 12, 2016 at 8:45 pm

If a car accident happens with death resulting, due to speed and or not wearing a seatbelt, would the insurance company still pay out?

March 18, 2017 at 11:14 am

    Yes, Renea they would still pay out the claim.

    March 23, 2017 at 6:53 pm
Traffic controller

Does accidental life insurance cover work related accidental death?

March 23, 2017 at 6:27 pm


    Please contact us to see if your occupation will be covered.

    March 23, 2017 at 6:56 pm

Hello Mack,
Your answers are very helpful. I have a question.
Does Accidental Life insurance have cash value?
Thank you

May 11, 2017 at 1:05 pm

    Hello Alexis,

    The accidental death plans don’t have any cash value. They are pure protection plans that only provide a death benefit to your family if you die in an accident. Let us know if you have any other questions.

    May 11, 2017 at 1:32 pm
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