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What Is a Group Accidental Insurance Policy?

Group accidental insurance is more commonly known as accidental death and dismemberment insurance, or AD&D. Accidental death and dismemberment policies pay a benefit as a result of an accidental death or loss of limb, eye or ability to hear. Group insurance typically is offered through an employer to employees who meet certain criteria, such as working a minimum number of hours. Group insurance may also be offered through a union, masonic group or other organization.

  1. Group Insurance

    • Group insurance, whether it's a health, life or accidental death and dismemberment policy, is a single insurance policy that covers multiple, unrelated people who are part of a group. Group insurance is most frequently associated with employers, but nonprofit organizations, athletic organizations, clubs and civic organizations may also offer group insurance to their members. When evaluating the risk of a group (known as underwriting), an insurance company considers the risk of the entire group and determines the rates based on the entire group. Group policies may be mandatory for all group members, or voluntary, depending on the terms of the policy, the type of insurance and the laws of your state.

    Accidental Death

    • The accidental death portion of an accidental death and dismemberment policy pays a benefit in the event of an accidental death. Policies define an accidental death specifically; it must clearly be an event that was in no way the decedent's fault and could not be anticipated. A death from a risky hobby, such as car racing or sky diving, would not be considered an accidental death. Some individual and group life insurance policies have an accidental death rider, or addition, that doubles the face amount of the life insurance policy. The terms of an accidental death rider are similar to a stand-alone accidental death or accidental death and dismemberment policy.

    Dismemberment

    • The dismemberment portion of an accidental death and dismemberment policy considers bodily injuries on a "per limb" or "per member" basis. Each member, or limb, is worth a percentage of the overall policy benefit amount. Members include hands, arms, legs, hands, eyes, speech and hearing. Loss of one member typically pays 25 to 50 percent of the policy benefit. Loss of two or more members typically pays out the full policy benefit. There are some circumstances in which the policy will not pay benefits. This includes injuries covered by Worker's Compensation, injuries that are self-inflicted and injuries that result from injured person being intoxicated or under the influence of a narcotic.

    Group Accidental Insurance

    • Group accidental insurance is often bundled with other group insurance products, such as life insurance and short-term and long-term disability insurance. Group insurance has an open enrollment period, during which you can opt-in or opt-out of insurance for the coming year, unless the coverage is mandatory. Premiums for the accidental death and dismemberment insurance are deducted directly from your paycheck after taxes. For specifics on your group's policy, contact your benefits administrator.

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