Affordable Life Insurance Protection for Your Family
Life Insurance with AD&D Explained
What is Life Insurance?
Life insurance is a contract between an insurance policy holder and the insurance carrier, where the insurer promises to pay a designated beneficiary a sum of money in exchange for a premium, upon the death of an insured person.
Life insurance pays out a death benefit if the insured person dies resulting from natural causes, illness or accidental death.
Depending on the contract, other events such as terminal illness or critical illness can also trigger payment from the policy to a beneficiary, or the insured.
The policy holder (owner of the insurance policy) typically pays a premium to the insurance company, either regularly (monthly or annually) or as one lump sum (single premium).
Other expenses, such as funeral and burial expenses, can also be included in the death benefits.
In addition, you may be able to add a rider (additional life insurance coverage) to your policy to provide a limited amount of life insurance on your spouse and/or children.
What is AD&D Insurance?
In insurance, Accidental Death and Dismemberment (also known as AD&D) is a policy that pays benefits to the beneficiary if the cause of death of the insured person is an accident.
This is a limited form of life insurance coverage which is less expensive than traditional life policies that cover other causes of death, in addition to accidental death.
An accidental death insurance policy is separate from a life insurance policy.
NOTE: However, life insurance policies include coverage for death resulting from an accident.
What is Double Indemnity?
A provision in a life-insurance or accident policy whereby the company agrees to pay twice the face value (death benefit) of the insurance contract in case of death of the insured person caused by accidental means.
This includes murder by a person other than, and not in collusion with, the beneficiary of the insurance policy, and most accidental deaths. It excludes suicide, and deaths caused by the insured person's own gross negligence, as well as natural causes.
Double Indemnity is a term of an insurance policy by which the insurance company promises to pay the insured or the beneficiary twice the amount of the stated death benefit of the insurance policy if the insured’s death occurs due to a particular cause or set of circumstances.
Double indemnity clauses are found most often in life insurance plans.
Double indemnity does not cover natural death or one that results due to natural causes, such as aging, or a health condition, suicide, and gross negligence. Thus, it covers murder of the insured committed by a person other than the beneficiary of the policy and accidents, e.g. car accidents.
People who are employed in high risk jobs often do not qualify for policies with a double indemnity provision. However, insurance companies that offer this benefit charge higher premiums.
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