Accidental death and dismemberment (AD&D) insurance
Also known as: AD&D insurance, double indemnity coverage
Accidental death and dismemberment (AD&D) insurance pays a benefit if the insured dies or loses a limb, sight, or another covered body part as the direct result of an accident. It covers accidents only — deaths from illness or natural causes are excluded.
Accidental death and dismemberment insurance is a limited form of coverage that pays only when a covered accident causes death or a specified physical loss. It can be sold as a standalone policy, as a rider on a life or health policy, or as a group benefit through an employer. Because it never pays for death from sickness, natural causes, or excluded activities, its premiums are low relative to ordinary life insurance.
AD&D benefits are structured around two amounts. The principal sum is the full face amount, paid for accidental death (and typically for the most severe losses, such as losing two limbs or sight in both eyes). The capital sum is a percentage of the principal sum — often 50% — paid for lesser losses like one hand, one foot, or sight in one eye. Policies define "loss" precisely, usually requiring actual severance of a limb or total, irrecoverable loss of sight, and require the loss to occur within a stated period after the accident.
When AD&D is attached to a life policy as an accidental death rider, it is often called double indemnity, because the policy pays twice the base face amount if death is accidental. Common exclusions include death from illness, suicide, war, and hazardous activities specified in the contract.
AD&D appears on state insurance licensing exams for both health and life & health lines. Expect questions distinguishing the principal sum from the capital sum, identifying what qualifies as a covered loss, and recognizing that AD&D pays nothing for death from natural causes.
Key takeaways
- AD&D pays only for death or dismemberment caused directly by an accident — never for illness or natural causes.
- The principal sum is the full benefit, paid for accidental death and the most severe losses.
- The capital sum is a partial benefit, typically 50% of the principal sum, paid for lesser losses like one hand or sight in one eye.
- As a rider on a life policy, accidental death coverage is often called double indemnity.
- Insurance licensing exams test the principal sum vs. capital sum distinction and AD&D's accident-only trigger.