AD&D insurance covers exactly what its name states: accidental death and dismemberment. What does this mean? In the event of a fatal accident or an accident that results in you losing your eyesight, speech, hearing, or a limb, AD&D will pay you or your beneficiaries a specified amount. However, there are restrictions and exclusions. To receive benefits related to an accident, your injuries or death usually must occur within a few months of the accident date. Also, you will only collect benefits if your death or injuries are proven, direct results of the accident.
Dismemberment coverage works on a "per-member" basis. If you lose one member (a hand, foot, limb, sight in one eye, speech or hearing), the insurance company will usually pay 50 percent of the full benefit. If you lose two members, you will receive the whole benefit. Coverage amounts for partial or complete paralysis vary, but are usually 25 or 50 percent.
Optional coverages sometimes include hospital stay coverage after an accident, and spouse and children coverage.
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