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Life Insurance vs Accidental Death and Dismemberment (AD&D)

Life Insurance vs Accidental Death and Dismemberment (AD&D)

Life Insurance vs Accidental Death

Term Life Insurance vs. Accidental Death & Dismemberment

Life insurance and accidental death and dismemberment insurance, or AD&D, have one thing in common: If you have them, no one should have to suffer financially if you die unexpectedly. There are many different types of Life Insurance policies. Knowing the difference between types of coverage is essential to getting the right insurance policy for your needs.  In this article we will cover Term and Accidental Death Life insurance.

What is life insurance?

People often forget the advantages of life insurance and dismiss it as an unnecessary expense. A life insurance policy protects your loved ones from financial devastation should you pass away. It helps your family and friends by giving them peace of mind so they can focus on mourning instead of finances during an already difficult time.

A life insurance policy such as term life insurance is a simple protection plan that pays benefits to your beneficiaries if you die within the term of the policy, regardless of the cause of death. The term life insurance policy will provide financial security for you and your family, whether you die of an illness, accident or other cause.

What is covered by a term life insurance policy?

When you choose term life insurance, you choose how much coverage is needed and how long the policy will last. Term life insurance policies typically cover periods ranging from 10 to 30 years. If you die after the term ends, there’s no payout because the policy has expired.

In most cases, at the end of your term, you can renew, convert it to a permanent policy or purchase a new policy. Beware your rates will be higher because you’ll have aged and could have developed new medical condition(s). You can get in touch with an Experior Associate and receive free, no obligation, life insurance quotes by filling out a form on our website.

What is Accidental Death and Dismemberment (AD&D) Insurance?

In 2017, accidents were the third-leading cause of death in Canada (Statistics Canada, 2019). The sudden death of a loved one can be devastating to the survivors emotionally and financially. An accidental death and dismemberment insurance policy (AD&D) provides a different set of benefits and coverage amount than a standard life insurance policy would. It pays off in the event that you die due to an accident, but it is not a comprehensive insurance plan that provides for all of your family’s financial needs should you die unexpectedly or prematurely. It can be a common addition to most life and health insurance policies to include accidental death and dismemberment coverage. 

Dismemberment refers to the loss of use of body parts such as your arms and legs or functions such as eyesight. Most AD&D policies pay a percentage of the total payout for the permanent loss or partial loss of use of a body part. Injuries covered by an accidental death insurance policy varies by company and policy. It is rare for an insurance policy to pay the full value of the coverage amount for less than a simultaneous loss of a limb and a major bodily function, such as sight in at least one eye or hearing in at least one ear.

You can choose from several levels of coverage, from $25,000 to $500,000. This type of insurance is for anyone legally living in Canada who wants extra protection from the unexpected. Experior Financial Group works with many insurance providers who offer great rates for accidental death insurance. For example, with one of our partners, you can pay as little as $25 a month for $250,000 worth of coverage and $50 monthly for $500,000 in coverage amount.

Advantages and Disadvantages of AD&D Insurance

covered by a term life insurance policy

When you apply for accidental death insurance, you don’t have to worry about your medical history. In addition, you will pay the same premiums as other individuals, no matter what age, gender or smoking status  you are. Depending on your specific AD&D policy, a death benefit is provided in addition to the death benefit provided by traditional life insurance. Your policy’s death benefit amount usually is equal to or double that of the traditional policy. 

AD&D policies can exclude high risk activities and so can term life insurance if it was planned before or during the underwriting process of your policy.. Limited policy coverage can be a disadvantage to those who rely on it because it only pays upon certain events. If death occurs due to these limitations, it is not covered under AD&D. Make sure to understand the limitations of your policy.

During planning, policyholders who have AD&D insurance may falsely believe that these assets can be used to improve life insurance totals. Since AD&D does not pay out until specific criteria are met, it is not a reliable indicator of a customer’s life insurance portfolio.

When to choose an AD&D policy?

AD&D insurance can provide valuable supplemental coverage at a relatively low price, but it’s no replacement for standard life insurance. Accident insurance is a worthwhile purchase if you are on a budget and have limited financial resources or are uninsurable. The policies are affordable and can protect you from financial loss. However, life insurance is a better choice than accidental death and dismemberment for ensuring your family gets a lump sum payment if you die. 

The purpose of AD&D is to provide supplemental coverage for accidents that result in injury which is not covered by traditional life insurance policies. An Experior associate can help you identify the coverage that meets your unique insurance needs and protects you from financial uncertainty.

Why should you choose Experior Financial Group for your Insurance needs?

It is true that insurance can be expensive, but there are a lot of options to choose from and many of them are affordable. Let Experior help you review your options. Our financial associates will do an Expert Financial Analysis and provide a quote that’s tailored to your needs.

Experior Associates are experts in the field of life accident insurance, helping clients determine the right coverage and policy for them. They excel at explaining the benefits and costs of accident insurance policies. We will provide information and answer all of your questions regarding investments, insurance products, taxes and retirement planning. Contact an Experior associate and get a quote today!


If you have adequate life insurance, you typically wouldn’t need AD&D insurance, but make sure you understand everything your policy covers. Supplementing life insurance with AD&D insurance can be a wise decision if you want to protect your loved ones in the event that you suffer an injury that prevents you from working or you die of an accident. We recommend working with an Experior Associate to learn more about the coverage options for your specific needs.

AD&D offers a form of life insurance that covers accidental death but not death to disease or natural causes. It’s different from normal life insurance because it covers such severe non-fatal injuries such as loss of a limb or paralysis.

One main difference between health insurance and accident insurance is the scope of benefits. For instance, the AD&D policy covers loss due to injury by accident. 

The coverage provided by an accident policy is often narrower in scope, as it only covers injuries caused by accidents as defined in the policy.

AD&D Insurance will not pay out if the beneficiary dies of cancer. AD&D’s life insurance component is specifically for accidental deaths.

Therefore, if a person dies of illness, cancer, heart attack, heart disease, diabetes or even just old age, AD&D insurance will not pay a death benefit to the beneficiary.

When considering an AD&D policy, it’s important to know what the policy will not pay for.

Accidental death can take many forms, including car accidents, plane crashes, accidental falls, drowning and dying in a fire.

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