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AD&D Insurance: How to Handle Accidental Death Insurance Claims

Accidental death and dismemberment insurance, also referred to as AD&D in the insurance industry, frequently works in conjunction with more extensive employee benefits plans like life and health insurance. In the event of accidental death or the untimely loss of vital bodily functions or limbs, an AD&D policy will pay a lump amount to the policy’s beneficiary. Proper claim handling is crucial if the surviving family wants to collect compensation for a valid claim. This article outlines the information on handling AD&D claims. 

AD&D Insurance Claim Coverage:

AD&D insurance can be acquired as a standalone policy or as a rider to another type of life insurance. However, one important question raised in either situation is, what does AD&D insurance cover? In essence, AD&D coverage combines two different insurance, accidental death insurance, and dismemberment insurance. Despite being purchased together, each part of the policy is somewhat independent and has its terms. Therefore, the coverage a victim’s beneficiary would receive depends largely on the loss suffered. 

Accidental Death Insurance:

The accidental death insurance component is similar to life insurance in that beneficiary receives a payout in cases of death. However, the policy only pays a death benefit if the death occurred due to a covered accident. 

Accidental death policies typically have restrictions regarding high-risk activities, such as scuba diving or skydiving, and won’t pay if an accident occurs during one of these. In addition, most insurers will pay a higher death benefit if the victim passes away while a fare-paying passenger in a “common carrier” accident. 

Dismemberment Insurance:

When you have dismemberment insurance, you are covered if you live through an accident but lose a limb. Some policies also cover paralysis or other ailments.

Payments for dismemberment are often expressed as a percentage of the death benefit of your insurance, with a specific percentage assigned to each limb. Although insurers frequently vary, the most typical payout structure is 50% of the death benefit per limb and 100% for the loss of multiple limbs.

Handling An Insurance Claim:

There must be no policy breaches for a claim to pay out to the designated beneficiary. The person receiving the benefits for accidental death should review the documentation before making a claim.

Claim Procedure:

The beneficiary may file a claim if the insurance policy covers the cause of death. Frequently, the insurance providers get in touch with beneficiaries to go over the specifics of the benefits. Upon completing the inquiry, the insurance policy may offer financial compensation. In some cases, a death certificate, medical records, or police reports may be required. 

Determining Liability:

AD&D insurance has some exclusions. It’s possible that the beneficiary will have to demonstrate that there are no exclusions from coverage and that no one was at fault for the accident. Any potential link to suicide could invalidate any accident benefits.

In general, non-accidental causes also include issues with one’s health, such as sickness, infirmity, disabilities, and disease. Other clauses could involve the consumption of drugs or alcohol that constituted the death and criminal behavior related to felony actions. The beneficiary might need to demonstrate that the damage was an accident unrelated to any of these clauses. The beneficiary may also need to retain legal counsel to assist with the process.

Legal Assistance:

A lawyer is typically required when an insurance company refuses to pay benefits for a legitimate accidental death claim. Usually, when a denial occurs, or the beneficiary wants to proceed with the appeal, they employ a personal injury attorney. However, if the insurance provider asserts that a policyholder was responsible for their accident or death, you should retain an ERISA accidental death and dismemberment, insurance lawyer.

Final Thoughts:

AD&D insurance isn’t the best option for everyone because it only pays out in the case of an accident. But if it’s being provided as a free benefit at work, accept it. To decide if the coverage you’d receive would be worth the price, consider the value you receive for any workplace policies you’d be required to pay for.

Featured Photo by Mikhail Nilov: