Author Topic: Accidental Death and Dismemberment  (Read 5129 times)

dios.del.sol

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Accidental Death and Dismemberment
« on: December 08, 2014, 03:13:45 PM »
I'm planning out my life insurance policy and I'm wondering about Accidental Death and Dismemberment (AD&D) Insurance. My work provides some degree of Life, AD&D, and Long Term Disability (LTD). I'm thinking of supplementing Life and LTD, but leaving AD&D as it is. If I die, I'm covered by Life insurance, if I lose a limb in an accident I'm covered both by LTD and by my generous medical plan. AD&D seems more like a morbid lottery ticket than needed protection. Thoughts? (We are a family of three: 2 plus a baby.)

J'onn J'onzz

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Re: Accidental Death and Dismemberment
« Reply #1 on: December 08, 2014, 03:33:53 PM »
I mostly agree with you but I carry a little supplemental ad&d anyway. It is so cheap through my company I just feel like I would rather pay the small amount per check and have it for my family just in case something were to happen to me.


Numbers Man

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Re: Accidental Death and Dismemberment
« Reply #2 on: December 08, 2014, 03:37:26 PM »
Accidental Death = Life Insurance
Dismemberment = Medical Insurance

AD&D seems like redundant insurance.

SailAway

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Re: Accidental Death and Dismemberment
« Reply #3 on: December 08, 2014, 08:13:05 PM »
I have a little AD&D. My job is risky so while I am very healthy at 38 if something happens to me it will probably be in the form of an accident. It's worth the small amount to know my husband could pay off the house and not have to remarry right away. Ok, ok, take a leave of absence from work. We work together so if I flip the ambulance and die in a crash or he dies in a house fire, I kinda feel like the other one deserves some time off. YMMV.

chucklesmcgee

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Re: Accidental Death and Dismemberment
« Reply #4 on: December 08, 2014, 09:44:21 PM »
It is a losing lottery ticket. If you can afford the loss, no point in paying out more to protect against it.

DCJrMustachian

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Re: Accidental Death and Dismemberment
« Reply #5 on: December 09, 2014, 01:05:31 AM »
It is a losing lottery ticket. If you can afford the loss, no point in paying out more to protect against it.

Agree 100%.  Why contribute your hard earned money to pay for Insurance company profits, advertising, operating expenses, taxes, and the promised payout divided by your expected odds?

Sarita

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Re: Accidental Death and Dismemberment
« Reply #6 on: December 09, 2014, 05:51:42 AM »
It may depend on how good your medical insurance is, and how big your stash is.  Insurance doesn't cover everything--- for example, it may not cover home health aide visits, expensive equipment, and then there may be co-pays for multitudes of doctor visits for a traumatic injury.   LTD is often about 60% of your salary.  So I would read fine details of all your core policies and then decide. 

Having watched a friend lose a leg in a motorcycle accident, I have a new respect for full insurance coverage given everything he had to go through to be able to resume normal life activities again.

Elle 8

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Re: Accidental Death and Dismemberment
« Reply #7 on: December 09, 2014, 07:30:16 AM »
Hmmm, interesting.  We just went through open enrollment at work and I did drop my Supplemental AD&D.  I figured I had enough life insurance already, so why would my family need more just because I die in an accident versus from natural causes?  I have to admit though, I wasn't really thinking of the Dismemberment portion of it.  Maybe I need to rethink...

Dezrah

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Re: Accidental Death and Dismemberment
« Reply #8 on: December 09, 2014, 08:26:59 AM »
I've also heard that some disability policies won't payout if you can do any work, not just the job that was paying the big bucks.

Like if you're a roofer but lose your leg in an accident, you might say, "I can't work as a roofer anymore, so pay me the for the disability."  Your insurer might say, "but you can still sit at a desk and work at a call center, can't you?  You're not disabled.  No payout for you."

Not all disability policies are like this, so again, read the fine print and ask questions.

Numbers Man

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Re: Accidental Death and Dismemberment
« Reply #9 on: December 09, 2014, 10:42:09 AM »
I have a little AD&D. My job is risky so while I am very healthy at 38 if something happens to me it will probably be in the form of an accident. It's worth the small amount to know my husband could pay off the house and not have to remarry right away. Ok, ok, take a leave of absence from work. We work together so if I flip the ambulance and die in a crash or he dies in a house fire, I kinda feel like the other one deserves some time off. YMMV.

Wouldn't your company's Workman Compensation Policy pay for all of that?

FrenchToast

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Re: Accidental Death and Dismemberment
« Reply #10 on: October 30, 2019, 07:05:24 AM »
So as open enrollment approaches, the option of AD&D is stumping me.  I'm currently enrolled in a 10k Life Insurance policy through my employer for $4 a year(annual cost increases by $4 w/ each 10k increase at max of 350k policy). My company offers a 100k AD&D policy for $15 a year. I'm in my early 30s and pretty healthy, but do have a small child, spouse, & no additional life insurance. Spouse has AD&D and life through employer at 80k.
Thoughts on increasing life vs enrolling in AD&D vs leaving it alone. It seems like such a small amount that why not, but is it worth it?

terran

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Re: Accidental Death and Dismemberment
« Reply #11 on: October 30, 2019, 07:20:12 AM »
So as open enrollment approaches, the option of AD&D is stumping me.  I'm currently enrolled in a 10k Life Insurance policy through my employer for $4 a year(annual cost increases by $4 w/ each 10k increase at max of 350k policy). My company offers a 100k AD&D policy for $15 a year. I'm in my early 30s and pretty healthy, but do have a small child, spouse, & no additional life insurance. Spouse has AD&D and life through employer at 80k.
Thoughts on increasing life vs enrolling in AD&D vs leaving it alone. It seems like such a small amount that why not, but is it worth it?

I agree with the conclusions earlier in this thread: AD&D is redundant. You and your wife should both have disability insurance and term life insurance sufficient to allow the family to continue to meet its goals despite the lost income whether the cause of death or disability is accidental or otherwise. Remember to account for both the lost income and also the lost extra set of hands in caring for your household chores and child. Also look at what social security will provide to offset these income needs.

My opinion is that term life insurance should be purchased from an outside company, not through the employer plans.

thesis

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Re: Accidental Death and Dismemberment
« Reply #12 on: October 30, 2019, 07:54:10 AM »
Insurance scares me - there's so much about it that I don't understand. For example, it's fairly easy to understand how financial advisors and brokers can scam you, but insurance is a whole other beast. I feel I really need to read up on it, because it's so important.

That said, it's definitely in the insurance industry's favor to make things as confusing as possible and to use fear to get you to pay the max. I've seen cancer insurance policies, and have a friend who has one (family history), but I'm like, "WTF? Wouldn't that be medical insurance?" More nuanced, I'm sure. But still...WTF???

Haven't bothered with AD&D, but have been thinking about disability insurance to maintain income if something really bad happens. Should really research the industry more

Laura33

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Re: Accidental Death and Dismemberment
« Reply #13 on: October 30, 2019, 08:30:47 AM »
I see no reason for insurance that is limited to a particular series of events.

My family needs life insurance.  They need the same amount whether I die in a car accident or a heart attack (in fact, they might need more if I incur huge hospital bills for the heart attack).  So why would I rely on insurance that covers only some of the possible circumstances that could lead me to need it?

My family needs disability insurance.  They need that coverage whether I am disabled in an accident or whether I get diabetes and need to have a leg amputated, or develop a mental issue that prevents me from working.  I have disability insurance through a disability policy, and that policy is an "own occupation" policy (e.g., I get paid if I cannot continue to work as a lawyer, even if I can still hold down a job at McDonald's).  So why would I rely on a policy that covers only some of the possible circumstances that could lead me to need it?

FrenchToast

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Re: Accidental Death and Dismemberment
« Reply #14 on: October 30, 2019, 10:11:55 AM »
@Laura33 I see your point, however my employer doesn't offer disability insurance. My assumption, please correct me if I'm wrong, is that disability insurance would be quite a bit more than $15 a year. Additionally, for a "young", "healthy" person, aren't the chances of an accident, car or otherwise, being the cause of a disability quite high?

DeniseNJ

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Re: Accidental Death and Dismemberment
« Reply #15 on: October 30, 2019, 01:23:18 PM »
You need the insurance amount that you need--you don't need more if you die from an accident than if you die from anything else.  I wouldn't pay a dollar extra for that. 

Term Insurance, health insurance, disability insurance, and SS. 

You're less likely to be dismembered than you are to simply be seriously injured from an accident or desease.  Accident insurance will only pay if you die.  Dismemberment only if you lose a limb.  I think the odds are better of me winning the lottery than losing a limb so I'd rather put $15 bucks a year toward that. :)

Aunt Petunia

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Re: Accidental Death and Dismemberment
« Reply #16 on: October 30, 2019, 04:43:13 PM »
My work provides 100k extra if I die in an accident vs dying of an illness. I never quite understood why because I would think dying of an illness would be much more expensive, at least in the US. Maybe because it saves their health plan lots of money?

 I'm not sure if AD&D would still apply if you got into a serious accident and died of complications years later.

Laura33

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Re: Accidental Death and Dismemberment
« Reply #17 on: October 31, 2019, 08:40:35 AM »
@Laura33 I see your point, however my employer doesn't offer disability insurance. My assumption, please correct me if I'm wrong, is that disability insurance would be quite a bit more than $15 a year. Additionally, for a "young", "healthy" person, aren't the chances of an accident, car or otherwise, being the cause of a disability quite high?

What DeniseNJ said.

Basically, you should base your plan on what your family needs, and then figure out how to get that most cost-effectively. 

Now, if the reality is that you're not going to go out and buy LTD insurance yourself, but you're willing to pay a few bucks for AD&D*, partial protection is better than no protection at all.  But think of it this way:  why is it that they can afford to offer it so cheaply, while LTD is so much more expensive?  There's a business reason for that.  If you are paying a small fraction of the price, you are buying only a small fraction of the coverage.

*Note that this "D" is for "dismemberment," not "disability" -- this will not provide coverage for disability caused by an accident, but will merely pay you a stated sum for the loss of a limb.  All of the other costs associated with the accident/disability/lost income, and all costs associated with any non-accidental loss of a limb, are on you.  I guess AD&D coverage may have had its place if you worked in a factory and didn't have workers' comp to cover you if you lost a hand in a press, but the world has changed a lot since that time.