What are the basics of dismemberment and accidental death insurance?

There are many advertisements out there that are willing to protect you against accidental death insurance. These advertisements usually offer additional riders to your policy, rather than a separate policy. While many people consider the advertisements very appealing, they don't realize that they might not need this AD & D coverage at all. Although accident coverage is considered to be crucial, most people don't need it at all.

Michael Snowdon, an academic associate at the College for financial Planning in Greenwood Village, Colorado says, "AD&D creates the illusion of having a lot more coverage.' It creates the illusion of having more coverage, but it doesn't provide nearly as much protection as it promises.

As a matter of fact, a death from "natural causes' or disease isn't going to be covered under AD&D coverage. The money that you would spend on AD&D really should be invested in other forms of insurance, recommends Jerry Rosenbloom, a professor of insurance and risk management at Wharton School of the University of Pennsylvania in Philadelphia.

Rosenbloom explains, "If you need the protection, you need it from any cause - be it an accident or something else. If you have adequate protection against anything, you really don't need AD&D.' With a whole or term life insurance policy, you are likely to be covered in case of any natural or accidental death.

Lou Madonna, national director of special risk sales at Hartford Life Insurance Co. says, "AD&D should be part of someone's overall planning. The foundation most people should start with is life insurance, then look at AD&D as a supplement to that. Most people I know can't afford or maybe don't want to spend those dollars solely on life insurance, and that's where AD&D comes in.'

Wayne Durlinger, life and health general underwriting consultant with State Farm Life Insurance Co. says, "People would rather take the extra money and buy a little extra life insurance.' While State Farm does offer two types of AD&D policies, neither one of them is popular.

People think that they might need accidental death coverage, but it isn't very likely for someone to die in an accident. As a matter of fact, the AD&D coverage is so unpopular amongst people that only 6 percent of the 5 million State Farm Life policyholders actually purchase accidental death coverage.

Snowdon claims, "Very few people actually die by accident and collect under the accidental death and dismemberment benefit. If you've got all kinds of money, and you don't care how you spend it, and you want to cover something that's not likely to happen - buy it.'