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What you need to know about your Accidental Death and Dismemberment (AD&D) Insurance Policy

by | Jul 27, 2022 | Firm News |

Each year, millions of Americans pay insurance companies for coverage, trusting that if the unexpected happens, the terms of the policy will be honored and their claims will be paid. One type of policy is Accidental Death and Dismemberment insurance.

What Is Accidental Death and Dismemberment (AD&D) Insurance?

An AD&D insurance policy is exactly what its name indicates – a policy that covers a policyholder in the event of death or dismemberment. This policy is typically added as a rider, or additional coverage, to a health insurance or life insurance policy. It can be provided through an employer or purchased as a private insurance policy.

This type of policy is often a supplement to term life insurance – meaning that the coverage offered by the AD&D policy is not enough to cover the full needs of a policyholder. Supplemental life insurance policies can help to bridge any missing coverage from term life insurance.

An AD&D rider is known as a “double indemnity” rider. This means that the beneficiaries will receive benefits from both the term life insurance policy and the AD&D policy.

AD&D Coverage, Limitations, and Exclusions

When purchasing any insurance policy, it’s important to always review the provided coverage and the policy limitations.

Typically, AD&D policies offer coverage for death due to an accident. It also provides coverage for the loss of a body part or the complete loss of use of a body part. Examples include the amputation of a digit or limb or the loss of use of that limb. The loss of hearing, speech, or sight and paralysis are also generally covered.

As with any insurance policy, there are limitations and exclusions. Limitations are conditions that are covered but are paid at a lower benefit than the norm and exclusions are a provision of the insurance policy that refers to circumstances in which coverage will not be provided.

AD&D Limitations

Many AD&D policies included a reduced benefit schedule based on the age of the insured. As an insured gets older, the amount paid to beneficiaries is reduced. The following is an example:

  • 35% reduction at age 65;
  • 60% reduction at age 70;
  • 75% reduction at age 75;
  • 85% reduction at age 80.

AD&D Exclusions

There are exclusions listed in every AD&D policy. Beneficiaries will not receive payments if:

  • The injury or cause of death occurred prior to the policy being in effect.
  • Death occurs from a natural cause, such as stroke, heart attack, or cancer.
  • The injury or death is caused by self-harm or suicide.
  • The injury or death occurred while the insured was committing a crime.
  • The insured is involved in an accident while driving under the influence of drugs or alcohol.
  • A patient dies during surgery.
  • The insured is harmed while participating in a riot, civil disturbance, or an act of war.
  • The insured is participating in a professional capacity as a pilot, sports player, or race car driver.

One of the most common and ambiguous exclusions is an intoxication exclusion. The wording in the insurance policy may state something similar to this:

“No benefit will be paid for a loss caused by or contributed to by the injured person’s intoxication.”

If it is determined that alcohol or drugs not prescribed by a doctor were consumed before the accident, a denial will often be issued based on this intoxication exclusion. This provision is often wrongly applied by insurance companies to avoid paying claims.

Applying For AD&D Benefits

Every insurance company has a claims process and is required to provide the claimants with information on what is needed to file their claim. Before filing the claim, it’s important to read the insurance policy carefully, keeping notes on coverage amounts, claim deadlines, and the supporting documents that could be requested during the claim review. This may include police reports, medical records, photographs, and witness statements. Always keep a copy of any paperwork provided to the insurance company as well as information on any communication that occurs.

Once the required information has been provided, the insurance adjuster will review the claim and supporting documents. Adjusters are trained to look for reasons to deny a claim and unfortunately, denials are frequently issued for legitimate claims that should have been paid. Understanding your policy, your rights, and the law can mean the difference between a claim denial and a claim approval. Before applying for AD&D benefits, it is recommended that you consult with an experienced AD&D insurance attorney.

Insurance companies often issue denials claiming that:

  • An underlying medical condition caused the accident that hurt or killed the insured. For example, if a driver has a car accident and the stress of the accident results in a heart attack, the insurance company may try to claim that the heart attack is what caused the accident.
  • The injury or death wasn’t witnessed.
  • There was evidence of alcohol or drug consumption.
  • Medical treatment caused death or disability.

Can An AD&D Denial Be Appealed?

Yes, if the initial claim for AD&D benefits is denied, applicants have the legal right to file an appeal. This process is complicated and it is best to consult an experienced AD&D insurance attorney.

Appeals must be filed quickly, typically within 60 days, which is why it’s important to contact an attorney as soon as the denial is received.

How Can An Attorney Help With An Appeal?

An attorney can obtain and review the full administrative copy of the claim file, investigate the circumstances surrounding the case, and build a comprehensive counterargument that explains why the denial is incorrect.

In many cases, the involvement of an attorney results in a successful appeal. However, in some cases, appeals are denied. If the appeal is denied, the only option is to file a lawsuit.

AD&D Litigation

If the insurance company will not do the right thing and upholds a wrongfully denied claim after an administrative appeal is submitted, the next step is to file a lawsuit.

Depending on the facts of the case and the law that applies, plaintiffs may be able to recover the denied benefits, compensation for attorney’s fees and the cost to file suit, and non-economic losses. Compensation can be obtained through a settlement or a trial verdict.

Contact An AD&D Lawyer Today

If you have questions regarding your initial AD&D policy or claim, the appeal process, or if you believe your claim has been wrongfully denied, contact our legal team today. DI Law Group has extensive experience in representing AD&D and life insurance claims at all stages of the process, from application through litigation.  We have successfully obtained millions of dollars in insurance benefits for our clients.

 

 

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