2Given its low price, Accidental Death and Dismemberment insurance (AD&D) might sound like a good idea, especially when you see headlines about fatal crashes and freak accidents and think, "What if that happened to me?"

An AD&D policy will pay a lump sum of to your beneficiary if you die in an accident and a portion of the benefit to you if you're severely injured.

When it comes to AD&D, Here are a few do's and don'ts:

Do understand how the coverage works. An AD&D policy will pay the full benefit if you die in an accident and spells out the percentages of payment you receive for injuries, such as loss of a limb, sight, or hearing. For instance, you might get 50% percent of the benefit if you lose a hand or foot, and 25% for the loss of an index finger and thumb on the same hand. Your death or injury must result directly from an accident and occur within a certain timeframe, usually 90 days.

Do consider it only as an extra - not a primary - layer of protection. Although any premature death is tragic, an accidental death happens in a split second, giving a family no time to prepare. AD&D provides that extra layer of coverage that might be worth considering if you work in a dangerous occupation. However, you should not make it a part of your a financial plan.

Don't count on it as a replacement for Life insurance. An AD&D policy pays the full benefit only if you're killed in an accident. To provide a death benefit for your beneficiaries regardless of how you die, it's better to buy Term Life coverage - which costs about the same as AD&D if you're young and healthy.

Don't think of AD&D as Disability insurance. This coverage protects your most valuable asset - the ability to make a living and support a family - by replacing a portion of your income if you become disabled and can't work. AD&D provides a single lump-sum payment and only if you suffer certain accidental injuries as defined in the policy.

To see if AD&D is for you, feel free to give our insurance professionals a call.
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