Accidental Death & Dismemberment (AD&D) insurance is a type of cover that pays a lump sum if a person dies or suffers serious injury due to an accident.

The key point is simple: the payout happens only if the event is caused by an accident — not by illness or natural causes.

It typically covers:

• Accidental death (full payout to nominees)
• Loss of limbs, eyesight, hearing, or speech (partial payout)
• Permanent disability or paralysis (payout depends on severity)

AD&D is usually not a standalone policy. It is often provided as an add-on or bundled with:
• Employer group insurance plans
• Credit cards or travel insurance
• Riders in life or health insurance policies

It does not cover events like illness, natural death, or non-accidental causes. Some high-risk activities may also be excluded unless specifically mentioned in the policy.

Rajesh, a 38-year-old delivery executive in Bengaluru, had AD&D cover through his employer. During a delivery, he met with a serious road accident and lost the use of one leg.

His policy had a coverage of ₹20 lakh. As per the terms, 50% of the sum insured was payable for the permanent loss of one limb. After submitting the required medical and police documents, the insurer paid ₹10 lakh directly to his bank account.

This amount helped him manage medical expenses, get a prosthetic limb, and set up a small shop to continue earning.

• Early 20th century: Accident-specific insurance grows with industrialisation
• 1950s: Becomes common in employer group insurance plans
• 1999 onwards (India): IRDAI regulations enable wider availability through insurers