What Is Accidental Death and Dismemberment Insurance?

Insurance policies provide peace of mind that you or your loved ones will receive compensation for certain expenses and losses you experience. For example, you pay for auto insurance so you do not have to worry about covering losses associated with a auto accident yourself. You may pay for health insurance so that you are covered in case you develop a chronic condition or serious illness or require unexpected medical treatment. Disability insurance can provide cover your lost income if you are injured or otherwise unable to work at your occupation in the future due to a covered event or condition.

Accidental death and dismemberment insurance (“AD&D”) insurance is a type of policy designed to pay benefits in the case of an accidental death or loss of a body part, or the use of a body part, the latter known as dismemberment. The key under these policies is that the loss must result from an accident. Thus, AD&D plans typically include two levels of coverage. The first is a death benefit that is paid to a person’s beneficiary if they pass away due to a covered incident as described above. The second is dismemberment insurance, which is paid out to the person who was injured and suffers from a “dismemberment.” These policies are common and can be obtained much like other types of policies. If your employer offers group insurance coverage, you may be able to elect AD&D coverage through that group plan.

What Does AD&D Insurance Cover?

AD&D insurance covers losses associated with a catastrophic accident or other incident involving a fatality or resulting in the loss of one or more body parts or the use of certain body parts.

However, simply having AD&D insurance coverage does not mean you will receive benefits if you make a claim for a death or a dismemberment. Like other insurance policies, AD&D policies are complex and typically include exclusions that impact claims payouts. On top of this, it is all too common for insurance companies to act in bad faith and deny claims that they should pay. It stands to reason that you may not know how to deal with an insurance company denying your claim based on a policy exclusion.

Understanding your policy, including what it requires for you to receive benefits and how it defines important terms (such as dismemberment) can help you determine how to address your claim and whether an attorney may be able to help you receive benefits.

What Is an Accidental Death?

AD&D plans pay out accidental death benefits only when a covered person passes away due to a covered accident. Every policy is different in how it defines accidental death, but this benefit usually applies to what are deemed exceptional circumstances—unplanned incidents that cause a fatal injury. Examples of such incidents are:

• A fatal auto accident
• A drowning
• Falls or other traumas that are fatal
• Homicides, in some cases
• Death resulting from unplanned or accidental exposure to a dangerous chemical

There are many deaths that do not easily fall into the category or definition of accidental death/death by an accident. It is the “gray area” cases in which insurance companies will deny these claims. Many of the deaths that appear to be accidental are complicated by factors that were involved with the death, such as drug or alcohol use, death that involves an underlying pre-existing physical condition, etc.

How Do AD&D Policies Define a Dismemberment?

A common definition of dismemberment in an AD&D policy is the loss of an entire body part or the loss of function of an entire body part. This is a standard definition used by insurance companies, though the specific language will vary from one insurance company or policy to another. For example, if you lose an arm, leg, or eye, you may qualify for coverage. If you lose your hearing but not your actual ears or your sight but not your eyes, you should also be covered. It is important to consult the details of your policy to understand exactly how dismemberment is defined for the purposes of a qualified claim.

Does AD&D Insurance Replace Life Insurance?

In general, AD&D insurance is considered a supplement for life insurance and not a replacement for it. These two types of plans provide different coverage. Your life insurance policy offers a death benefit that pays out in cases other than accidental death, for instance. However, consulting with an experienced insurance broker or financial planner can help you ensure there are no major gaps in your insurance coverage.

Understanding AD&D Policy Exclusions

Every insurance policy has exclusions – types of incidents or losses that are specifically not covered by the policy. Common AD&D policy exclusions are:

• Medical Treatment Exclusions: Coverage may be excluded if the death or injury results from a medical condition, medical treatment or surgery not related to the accident.
• Injuries Resulting from Illness: AD&D policies cover accidents rather than illnesses, so injuries or death resulting from illness or natural causes are usually excluded.
• Intoxication: Coverage may be denied if the death or injury occurs while under the influence of alcohol or drugs, as specified in the policy. This exclusion does not only include explicit substances; use of prescription drugs that are not taken according to a specific prescription may result in a claim denial based on this exclusion.
• Pre-existing Conditions: Coverage may be excluded for injuries or death resulting from pre-existing medical conditions, particularly if they cause or substantially contribute to the accident.
• Criminal Activity: Policies typically exclude coverage for injuries sustained while committing or attempting to commit a crime.
• Engaging in Hazardous Activities: Coverage may be excluded if death or injury results from participating in hazardous activities such as skydiving, racing, or extreme sports.
• Intentional Self-Inflicted Injuries: AD&D policies often exclude coverage for injuries or death resulting from self-inflicted harm or suicide.

War or Acts of War: Many policies exclude coverage for injuries or death resulting from participation in war, declared or undeclared, or acts of terrorism.

Participation in Active Military Duty: Some policies may exclude coverage for injuries or death sustained while on active military duty, as military service often provides its own insurance coverage.

Aviation Activities: Some policies may exclude coverage for injuries sustained while traveling in private aircraft or engaging in aviation-related activities, excluding commercial flights.

What To Do When Your AD&D Claim Is Denied

If an insurance company denies your claim based on a policy exclusion, consulting with an experienced ERISA or non-ERISA insurance lawyer can help clarify whether the insurance company’s denial of your claim was proper. If the insurance company has improperly denied your claim, including based on a policy exclusion, having the right insurance/ERISA attorney in your corner can be critical in submitting an effective appeal and, if necessary, handling a lawsuit against the insurance company.

If your AD&D claim has been improperly denied, the knowledgeable and experienced attorneys at McKennon Law Group PC can recover the benefits you are owed. Our team is well-versed in AD&D insurance claims, and we fight aggressively to protect your rights and ensure you are compensated according to your policy. Call McKennon Law Group PC at 949-504-5381 for a free consultation now.