Direct Answer
Standard term life insurance does not pay for dismemberment; it only provides a death benefit if the insured person dies within the policy term. To cover loss of limbs or other catastrophic injuries, you must add an accidental death and dismemberment (AD&D) rider or purchase a separate AD&D policy.
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How AD&D Riders Work
An AD&D rider attaches to a term policy and pays a supplemental benefit if the insured suffers a qualifying injury, such as loss of a hand, foot, sight, or hearing. The payout is usually a percentage of the base death benefit, often 50% to 100% depending on the severity of the injury.
Key Differences Between Term Life and AD&D
- Trigger: Term life pays only on death; AD&D pays on specific injuries or accidental death.
- Cost: AD&D riders add a modest premium, typically a few dollars per $100,000 of coverage.
- Exclusions: Both policies exclude injuries from self‑inflicted harm, war, or illegal activities.
When to Add an AD&D Rider
Consider a rider if you work in a high‑risk occupation, enjoy extreme sports, or want additional financial protection for medical expenses and lost earnings after a serious injury. Compare the rider cost against standalone AD&D policies to ensure you're not paying duplicate premiums.
Typical AD&D Benefit Table
| Injury | Benefit % of Base | Notes |
|---|---|---|
| Loss of a thumb or finger | 10% | Minor loss, low payout |
| Loss of a hand or foot | 50% | Major functional loss |
| Loss of sight in one eye | 30% | Significant impairment |
| Loss of both eyes or both limbs | 100% | Maximum payout |