Do I need life insurance and accidental death insurance?


Accidental death and dismemberment insurance (also known as AD&D insurance) provides a lump sum benefit in cases where a serious injury or death results in a devastating blow to you and your family’s finances. AD&D insurance offers protection for accidental death and injury at a lower premium than standard life insurance.


You’re a responsible adult. You care and provide for your family by working hard, and you are looking to protect them against the possibility of losing your income. You’re doing the grown-up thing. Millennials call it “adulting.” But if you are considering getting accidental death insurance, is that enough?

If you think you know everything there is to know about life insurance, you’re probably rolling your eyes and contemplating closing this tab. Well, just hold on a minute because there are a few things you should consider. Especially if the only thing the grown-up you have bought is an accidental death and dismemberment insurance in the belief that you and your family are fully protected. It may have seemed quite a deal at the price and convenience it came with, but accidental death insurance may not cover everything you think it does. Read on!

What is accidental death and dismemberment insurance?

Accidental Death and Dismemberment insurance (aka AD&D insurance) is a specialized form of a life insurance contract whereby the insurance company agrees to pay a sum of money to the insured or the insured’s dependents, should the insured die, or suffer a bodily injury such as lose a limb, become paralyzed, or lose their hearing, speech or sight, due to an accident. In return for this financial protection, insurance companies will charge a cost, also called a premium, which has to be paid monthly or annually. 

The purpose of accidental death and dismemberment insurance is to cover types of incidences and edge cases that are deemed unintentional and accidental. Accidents are the leading cause of death for Canadians below the age of 45 and the fourth leading cause of death for Canadians across all ages (source: Government of Canada statistics). Because of the sudden nature of such incidents, accidental deaths can arguably create more serious financial consequences for the loved ones left behind than passing away from natural causes.

What is meant by dismemberment insurance?

As the name suggests, “life insurance” provides funds to your family in the event of your untimely death. But suppose you suffer a bad accident and you don’t die and are only rendered unable to work for a living. This, for all intents and purposes, is dismemberment. Unlike the monthly nature of disability insurance payouts, dismemberment insurance will offer a lump-sum of money to the insured in the event of specified bodily injuries.

If speaking is an important part of your job and you lose the power of speech, life insurance won’t cut it. If you’re a computer programmer and you lose the power of sight, then you’re in the same predicament. These are instances where life insurance would not do you a heck of a lot of good. An accidental death and dismemberment insurance policy, on the other hand, does.

Accidental death and dismemberment usually come together, but not always. So you should definitely check what’s in your insurance folder. Most companies will offer the coverage (i.e. cover the full payment in the case of accidental death and partial payment in the case of dismemberment within the same policy). However, some insurance companies will require you to purchase the dismemberment benefit separately as an optional benefit to the accident-only insurance or may not offer the dismemberment benefit at all.

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What is the difference between accidental death insurance and life insurance?

The thing to remember is accidental death and dismemberment insurance is NOT life insurance. Similar to life insurance, AD&D policies also pay a death benefit, but as the name suggests, they only provide coverage in the event you die due to an accident. If you only have accidental death insurance, and you pass from a natural condition you were diagnosed with, that’s not an “accident.”

Because accidental death insurance covers a much narrower scope than what life insurance encompasses and the benefits are generally lower, accidental death and dismemberment insurance is generally much less expensive than most life insurance policies.

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Life Insurance Accidental Death and Dismemberment Insurance
Pays a death benefit regardless of the cause of death i.e. covers both natural and accidental causes of death Pays the full death benefit in the event of death from an accident
No living benefit due to bodily injury from an accident Provides a living benefit i.e. partial payment of the benefit amount in the case of specified bodily injuries
More expensive than AD&D, since it covers a wider range of causes Less expensive, since it covers specified causes
Generally requires medical questions and underwriting Guaranteed acceptance i.e. does not require medical questions to enrol
May have exclusions for pre-existing health conditions No exclusions for pre-existing conditions
Offers much higher coverage than AD&D policies Limited coverage amounts

Is accidental death insurance a good idea?

Accidental death and dismemberment insurance can be a great option for those that don’t qualify for life insurance for whatever reason. It can also be used to supplement your present life insurance coverage. It can protect you in a number of different ways that regular life insurance won’t, and it’s sometimes much more affordable. If you’re in the construction industry, for example, or any other line of work where the risk of severe injury is ever-present, accidental death and dismemberment insurance is probably right up your alley. 

In cases where you already have life insurance, accidental death and dismemberment insurance can supplement your coverage by providing coverage in the rare cases you lose an appendage or the use of your senses like sight or hearing.

How do I get accidental death insurance in Canada?

The good news (as mentioned) is that accidental death and dismemberment insurance can be cheaper than life insurance. In some cases, getting an accidental death and dismemberment insurance policy with the same company that provides your life insurance is just a phone call away. 

To learn more about accidental death and dismemberment insurance, and how signing up for such a policy might work for your current life insurance coverage needs, get in touch with one of PolicyAdvisor’s licensed insurance advisors. We are Canada’s number one online insurance advisor and represent plans and policies from 16 of the country’s largest insurance companies.

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  • Accidental death and dismemberment insurance provides a lump sum benefit if the insured dies due to an accident. It also if they suffer an injury that inhibits them from working.
  • Because its coverage is narrower than traditional life insurance, AD&D insurance typically has lower premiums, as well as more limited benefits.
  • Accidental death and dismemberment insurance do not necessarily come as a pair: in some cases, dismemberment insurance is an optional add-on to accident-only insurance.

By Carly Griffin
Senior Insurance Advisor, LLQP
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