What is Accidental Death and Dismemberment Insurance?

James Rodriguez James Rodriguez updated on 2022-10-21

Every year in Canada, between 15,000 and 20,000 people die from accidental causes annually. The three most common causes are car crashes, poisonings and falls. In addition, there are between 10,000 to 15,000 victims of car crashes who suffer serious injuries every year.

Certain jobs or lifestyles have higher risks of accidental death. One way you can seek to protect your dependents is by purchasing specific insurance that will cover this. Our guide below will take you through the whats, hows and why of this kind of insurance policy.

What is accidental death insurance?

Accidental death insurance is sometimes known as accidental death and dismemberment insurance. This is because as well as covering you in case of death by accident, many policies also cover serious injury such as the loss of a limb.

Good to know

Dismemberment is legally defined as the complete severance of one arm or one leg at or above the wrist or ankle joint, or the complete and irrecoverable loss of the sight of one eye.

Accidental death insurance is usually sold as an add-on to an existing life insurance policy. It should not be used as a replacement for life insurance. If you do not have a life insurance policy in place, consider proceeding with that before buying an accidental death policy.

Get a life insurance policy that's right for you and your loved ones

Get quotes in just seconds

Who offers accidental life insurance?

Most major life insurance companies offer accidental death insurance as an add-on under slightly different names. Providers include including:

ProviderPolicy name
AIGAccidental Death and Dismemberment Insurance
AMAAlberta Medical Association's Accidental Death & Dismemberment (AD&D) Insurance
BMOBMO Accidental Death Benefit Insurance
CIBCCIBC Accident Protection Plan
ManulifeAccident Insurance
ScotiaAccidental Death Insurance
Sun LifeSun Life Go Accidental Death Insurance
TDTD Accidental Death Insurance
Accidental death and dismemberment insurance Canada

What does accidental death insurance cover?

The definition of what is considered accidental death in insurance can be a bit tricky and policies tend to have a long list of exclusions and qualifications. Let's take a look at the conditions and definitions of a sample policy from TD.

Firstly, an 'accident' is defined as being "sustained directly and independently from all other causes". This means, for instance, that if a policyholder died or was seriously disabled by a disease they would not be eligible for a pay-out. In this case, you would be better served by purchasing critical illness or long-term disability insurance.

TermDefinition
Critical IllnessAcute heart attack, life-threatening cancer, stroke
DeathSuicides and deaths that happen while committing a crime are not covered
Loss of armArm lost from wrist up
Loss of legLeg lost from ankle up
QuadriplegiaTotal severe of spinal cord
Loss of sightTotal loss of sight in both eyes
Accidental death definitions

What does accidental death insurance not cover?

The following are excluded from coverage by an accidental death and dismemberment insurance policy:

  • suicide and self-mutilation
  • death or dismemberment that happens while committing a crime
  • accidents due to intoxication
  • accidents occurring during a normal pregnancy

How much does accidental death insurance cost?

Accidental death insurance is usually a rider on an established life insurance policy. Let's take a look at some of the rates from leading providers for a 33-year-old individual with no dependents for $100,000 of coverage:

ProviderCost
BMO$9.47/month
CIBC$8.50/month
Scotia$16.62/month
TD$10/month
Cost of accidental death insurance

Get a life insurance policy that's right for you and your loved ones

Get quotes in just seconds

Do you need accidental health insurance?

The answer to this question depends on your individual circumstances. Do you live a life that puts you at heightened risk of having a serious accident? In 2018 just 6% of all annual deaths in Canada were due to injury and poisoning. Of that 6%, nearly a fifth were as a result of opioid overdoses, something specifically excluded by every accidental death insurance policy.

Accidental death insurance is relatively cheap compared to term life insurance because the odds are that you will probably not collect on it. On the other hand, you may have a job or a lifestyle that puts you at a level of risk above the national average. Let's take some examples.

Tyson, 24, is a website designer who lives with his partner in Vancouver. Tyson loves city life and is happiest at the weekend in wine with friends or at the cinema. Tyson is therefore low-risk and would be better served by purchasing traditional life insurance.

By contrast, Emmeline, 30, drives a log truck on Quadra Island, BC. She works long hours in a tough environment and likes to go hiking on her own in her free time. Logging is Canada's most dangerous industry with a recent study showing that 2.8% of the workforce is killed or injured every year. Emmeline should also have traditional life insurance, but for her, it would make sense to add an accidental death and dismemberment rider.

Accidental death and dismemberment vs life insurance

Accidental death insurance cannot replace traditional life insurance. However, it can be an interesting add-on. The crucial difference between the two is that life insurance only pays out when you die, whereas accidental death pays out also in case of a serious, mutilating accident.

However accidental death does not pay out if you are disabled as a result of illness. Also, as we have seen, there are many exclusions which might prevent a benefit from being triggered, including the legality of your actions, the intentionality of your actions and your state of intoxication.

If you are working in a high-risk industry, like login or fishing then it may make sense as an add-on. For more generalized coverage, it probably makes sense to combine a term life insurance policy with critical illness insurance or long-term disability insurance.

Ready to compare different providers?

Get a life insurance policy that's right for you and your loved ones

Get quotes in just seconds
An expert will respond
Your name is required
Comment's content is required.