Voluntary Accidental Death And Dismemberment Insurance (VAD&D)

Voluntary accidental death and dismemberment insurance (VAD&D) is a financial protection plan that provides a beneficiary with cash in the event that the policyholder is accidentally killed or loses a certain body part. VAD&D is a limited form of life insurance and is generally less expensive than a full life insurance policy.

Voluntary accidental death and dismemberment insurance (VAD&D) is an optional benefit offered by some employers. Premiums are based on the amount of insurance purchased, and this type of insurance can make sense for workers in occupations that place them at high risk of physical injury. Most policies are renewed periodically with revised terms, although the client's consent with renewal is often implicitly assumed.

How much the policy will pay in the event of a claim depends not only on the amount of coverage purchased but on the type of claim filed. For example, the policy might pay 100 percent if the policyholder is killed or becomes quadriplegic, but it might only pay 50 percent for the loss of a hand or the permanent loss of sight in one eye.

There are four common types of group AD&D plans offered: 1) Group Life Supplement, which is included as part of a group life insurance contract and the benefit is typically the same as the group life benefit; 2) Voluntary AD&D, which is offered to members of a group as a separate, elective benefit and premiums are paid as part of a payroll deductions; 3) Travel accident, which is provided through an employee benefit plan and provides supplemental accident protection to workers while they are traveling on company business; and 4) dependents, which provides coverage for dependents of employees.

Certain death circumstances are excluded from many AD&D policies including death by illness, suicide, non-commercial radiation, and natural causes. Additionally, death while under the influence of any non-prescribed drugs or alcohol is also most likely exempt from coverage. Overdose with toxic or poisonous substances and injury of an athlete during a professional sporting event may also void the right to a claim. Some insurance carriers are willing to alter their clients' coverage to include some of these risks, but every such extension will typically result in higher premiums for the client. 

The process of claiming an AD&D benefit can be lengthy and the deceased client may undergo an autopsy. The terms of death are often officially investigated before a claim is approved by an insurer.