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The Insurance Buying Guide: Accidental Death and Dismemberment

Like stand-alone accidental death and dismemberment insurance, AD&D riders include a death benefit, which is payable in the event of death resulting from accidental bodily injury. A companion coverage is provided for loss of limbs or sight, often called dismemberment coverage.

When you buy this additional coverage, your insurance company will attach a schedule that lists various dismemberments and losses of sight for which specified sums will be paid. The sums payable usually are expressed as percentages of the death benefit limit, or sometimes as percentages of a limit in the policy known as the principal or capital sum.

The intent of the dismemberment feature is to provide you with a lump sum that will help you through any period of rehabilitation or pay for training for work other than what you used to do.

In some cases, however, you might be disabled for a while and -- during the disability -- suffer one of the losses listed in the schedule. In this situation, you would be paid disability income up to the time of the loss of limb or sight only, then you would receive the lump sum.

Most company policies provide that, even if you are not disabled after an accident, if a loss of limb or sight occurs within 90 days of the date of the accident, the sums in the schedule will be paid.

Accidental death and dismemberment coverage provides both a life insurance and a health insurance benefit. However, the life insurance benefit applies only to accidental death and is not paid for death by natural causes.

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