What is the purpose of "accidental death and dismemberment" insurance?

The purpose of "accidental death and dismemberment" (AD&D) insurance is to provide financial compensation in the event of an accidental death or certain specified injuries, such as the loss of limbs or eyesight. This type of insurance is designed to address the specific scenarios where individuals suffer severe outcomes due to unexpected accidents. The payout from AD&D insurance can help ensure that the insured or their beneficiaries receive financial support during a challenging time, whether that involves covering immediate costs or aiding in long-term adjustments following the loss of a limb or other critical injury.

While other insurance products may cover health-related expenses, income replacement due to illness, or assist with funeral planning, AD&D insurance is uniquely focused on the consequences of accidents, making it distinct in its purpose and functionality.