Accidental Death and Dismemberment insurance, known as AD&D in the insurance world, can be confusing. Typically, this benefit is a provision that covers unintentional death and/or dismemberment.
Dismemberment, however, can include a number of scenarios aside from actually losing a limb. It can include the loss of use or function of a body part or bodily function such as limbs, vision, hearing, or speech. However, each policy is different, so it’s important to know what is covered for you and your plan.
Dismemberment policies will often pay for a percentage of the loss of limb, partial or permanent paralysis, or the loss of use of a body part or function. Under the accidental death part of an AD&D provision, beneficiaries receive benefits in the case of the insured person’s death. In most circumstances, a cap will be placed on what beneficiaries can receive. This ordinarily covers unique circumstances such as accidents involving equipment, traffic accidents, drowning, other exposure to the elements and homicide.
Some instances are not included under AD&D. These exclusions frequently include suicide, death from a natural illness or war injuries. Often if the death or dismemberment occurs as a result of an incident that was illegal or could result in a felony, it is not covered and no benefit is payable.
Content by Lockton Dunning Benefits with info from: https://www.investopedia.com/terms/a/accidental-death-dismemberment-insurance.asp