What Is the Difference Between Life Insurance and AD&D?

Life insurance and accidental death and dismemberment insurance (AD&D) are two related, but different, types of insurance. Both of these types of insurance have their place, but you should understand the difference between them before making a purchase.


Life insurance pays a substantial death benefit in relation to the premiums you pay. Accidental death and dismemberment will compensate you if your death is caused by an accident or if you lose a limb or some other body part.


Life insurance only pays when you die inside the term of the policy. For example, a 10-year term policy only pays within the 10 years that the policy is in force. For permanent insurance, premiums can often be substantial and expensive compared to term life insurance. AD&D insurance may never pay a claim because your death must result from an accident or you must lose a body part listed in the policy contract in order to collect on the policy.


Make sure that the insurance makes sense. For example, AD&D insurance only makes sense if your hobbies, lifestyle or occupation would result in your death by accident or if you would become seriously maimed. Life insurance, in general, is suitable if you have insurable needs, like a mortgage that needs to be paid off in the event of your premature death.