As a general rule, accidental death and dismemberment insurance is not extended to a consumer via a free-standing policy. Rather, accidental death and dismemberment insurance are included in a health insurance or life insurance policy through what is known as a rider. (A rider is an optional addition to an insurance policy. A rider is also known as an endorsement.) You may have heard the term accidental death and dismemberment insurance. Nonetheless, you may not know what really is meant by accidental death and dismemberment insurance.

Basic Definition of Accidental Death and Dismemberment Insurance 

In essential terms, accidental death and dismemberment insurance is a rider that adds policy coverage in the event the insured suffers an unintentional death or dismemberment. Dismemberment typically broadly defined in this type of insurance police add-on. Dismemberment under this type of insurance endorsement covers not only actual loss of body parts but also loss of use or functionality. Examples of losses that may be covered via a dismemberment rider include:

  • Arms
  • Legs
  • Feet
  • Hands
  • Eyesight
  • Speech
  • Hearing

As is the case with any type of insurance policy or rider, you need to closely examine the terms and conditions of an accidental death and dismemberment endorsement. In some cases, there can be significant coverage limitations when it comes to an accidental death and dismemberment rider on a health insurance of life insurance policy. 

Accidental Death Insurance Coverage

An iconic Hollywood film entitled Double Indemnity, starring Fred MacMurray, Barbara Stanwyck, and Edward G. Robinson, presents a plot literally revolving around accidental death insurance coverage and nefarious activities to collect on that provision. An accidental death insurance rider is also known as a double indemnity endorsement. 

Double indemnity gets its name from the fact that an accidental death insurance rider oftentimes mirrors the coverage contained in the basic insurance contract. In simple terms, if a person dies an accidental death, the beneficiary of the insurance policy receives double the benefit than would be tendered if the policyholder died a natural death. 

Dismemberment Insurance Coverage

Dismemberment insurance coverage is a bit more complicated when it comes to award of benefits than accidental death insurance. As a matter of practice, a typical dismemberment rider pays a percentage of the total available policy coverage. In other words, if an insured loses a limb, he or she will receive some percentage of the available coverage contained in the policy rider. 

As noted, an insurance company rarely pays out 100 percent of available policy rider coverage. The one exception is a situation in which the loss of a limb is accompanied by the complete loss of a major bodily function. For example, a 100 percent policy payment might be made is an insured loses both eyes (dismemberment) and sight (bodily function). If a person loses a leg, in theory, that individual has not completely lost mobility (bodily function) because he or she is able to get around with the assistance of some type of medical device.  

Common Accidental Death Insurance Exclusions

As mentioned earlier, you need to closely examine an accidental death and dismemberment insurance policy rider to make certain you understand what is included in the coverage and what is excluded. There are specific circumstances that routinely are included in lists of exclusions in an accidental death policy rider. (Bear in mind that even if something is excluded in a double indemnity rider, there might be coverage in the underlying or associated policy of insurance.) Example of accidental death exclusions include:

  • Suicide
  • Death from illness
  • Death by natural causes
  • Death during war
  • Overdose of toxic substances (drugs)
  • Death while under the influence of prescription or nonprescription medications
  • Death of professional athlete during a sporting event
  • Death by felonious act (take a gander at the film Double Indemnity)

Accidental Death and Dismemberment Insurance Waiting Periods

In addition to outright rider exclusions when it comes to accidental death insurance, there can be waiting periods before coverage is available through an accidental death and dismemberment insurance policy endorsement. This represents another component of an insurance contract that you need to closely examine.

Waiting periods may extend from a matter of a month or two upwards to a year. The unspoken reality behind a waiting period is to lessen the possibility of insurance fraud. (Yet again, check out Double Indemnity.) 

The possibility may exist that the waiting period can be shortened. The means of shortening a waiting period typically is accomplished by paying more in premiums. 

Consumer assistance representatives in the California Insurance Department, can provide more information about accidental death and dismemberment insurance riders. In addition, if you find yourself with issues regarding an existing insurance policy, staff at the department may be able to provide you some guidance as well. You can contact the California Insurance Department through the agency’s website