Are AD&D policies from the bank worth it?

It seems like every other month you get the same notice in the mail from your bank or credit union: A free offer of a $1,000 accidental death and dismemberment (AD&D) policy – just in appreciation for being their customer!

All you need to do is sign the form they sent you and send it back in. But, like many other people, you’ve never done it. Maybe you wondered exactly what good $1,000 would really do if you were killed in an accident or maybe the whole thing just seemed a little morbid. Are those policies really worth having, anyhow?

It’s wiser to get your AD&D policy through an actual broker

Here’s the thing: That $1,000 policy only costs your bank a few pennies a year – and it’s all advertising dollars. As soon as you sign and submit your form, you can generally expect increasingly ominous messages about the importance of AD&D policies and a warning that you don’t have enough coverage.

That gives the bank a chance to upsell you. A much bigger policy comes with a much bigger premium, and you have to pay for that yourself – but the charge is usually low enough (under $10) that it gets lost or forgotten about pretty quickly).

You also don’t really get the chance to customize your AD&D plan to your needs. It’s not that AD&D policies aren’t a good idea, because they are – but the policy that is most suitable for a professional chef, for example, may not be the right policy for a surgeon.

Working with your regular insurance agent to obtain a life insurance policy that has an AD&D rider or a separate AD&D policy can help you make sure that you fully understand your coverage options, too. For example, some policies pay more if you’re maimed or killed on public transportation, which could be important if you travel frequently for work. Others exclude deaths and injuries caused by “risky behavior,” so you want to know how that’s defined.

Even with a good accidental death and dismemberment policy , you can run into trouble when you need to make a claim. It’s always good to remember that insurance companies exist to protect their investments, not people – and that legal guidance when dealing with one is wise.