Accidental Death & Dismemberment (AD&D)

Concept and Mechanics

AD&D is the Anglo-American basic model of the capital accident benefit. Its reference value is the principal sum, which is paid in full on accidental death occurring within a defined period – frequently 90 to 365 days after the accident. For non-fatal injuries the policy contains a schedule of losses: loss of both hands, both feet or the sight of both eyes, as well as permanent total disablement, are usually compensated at 100 per cent, loss of one hand, one foot or one eye at 50 per cent, and loss of a thumb or index finger at 25 per cent of the principal sum; paralysis is sometimes rated at up to 200 per cent. “Loss” generally means physical severance or the complete and irrecoverable loss of use. An example from practice: group PA wordings list accidental death and permanent total disablement at 100 %, loss of hearing in one ear at 30 %, loss of the lens of one eye at 60 % and loss of a thumb at 25 to 30 % of the capital benefit sum insured, with third-degree burns rated by affected body surface; “loss of limb” is defined as severance at or above the wrist or ankle or permanent total loss of use.

Prevalence and Contract Forms

In the United States AD&D is frequently offered as a rider to employer group life insurance or as a standalone group policy and is then colloquially called “double indemnity” because the death benefit doubles on accidental death. In the London market and in international programmes AD&D forms the core of group personal accident insurance, supplemented by temporary total disablement (weekly benefit) and medical expenses; sums insured are set as a fixed amount or as a multiple of annual salary. Business travel accident, key person and sports PA covers follow the same structure.

Delimitation from Continental European Practice

Compared with the schedule of disability percentages used in the German-speaking markets, AD&D works with fewer and more coarsely tiered loss items and has neither progression nor an overall medical assessment for unlisted impairments; partial loss of function is captured only where the policy includes a permanent partial disablement scale. In international group accident programmes it must therefore be clarified whether local policies pay according to a continental schedule or an AD&D table and how the definitions of death, loss and total disablement are harmonised between master and local policies.