What does AD&D insurance cover?

Accidental death and dismemberment, or AD&D, insurance is a type of coverage that helps to protect your loved one’s financial future in the event of your death or permanent disability. Depending on your Colorado employer, you may receive a free AD&D insurance policy as part of your employment benefits package. However, it’s important to note that many employer plans have smaller coverage limits than employee-purchased plans.

How do AD&D insurance plans work?

These types of insurance policies offer you or your beneficiaries a specific amount of money in the event that you become dismembered or die. AD&D insurance is only used to cover these instances as a result of an accident. There are specific requirements that must be met for this type of insurance policy to kick in. Apart from your death causing a positive cash-in of the policy, losing your speech, hearing, eyesight or even a limb will qualify you to receive your benefits as well.

Dismemberment coverage is on a per-member basis

When it comes to the dismemberment coverage of the policy, it can get a little complicated. This type of coverage is dispersed on a per-member basis. Say that you lose sight in one of your eyes but still can see out of the other one. Your dismemberment coverage will only pay out 50% of the full benefit amount. Policies can include stipulations about covering 25%, 50% or 100%. Apart from the dismemberment coverage, you can typically add-on various coverages like hospital stay coverage.

AD&D insurance can be a little tricky to understand. Apart from understanding the main inclusions of the policy, it’s a good idea to ask about the typical exclusions. This will help you to better understand whether the investment in this type of insurance is right for you and your family.