Free Accidental Death & Dismemberment Insurance… Yay?
I’ve been noticing that multiple banks like Washington Mutual, Bank of America, and other banks have been offering me “free” Accidental Death & Dismemberment (AD&D) Insurance. Usually I get around $1,000 to $3,000 of complimentary coverage, just for being a valued customer. Awww, how thoughtful! At first glance, it sounds pretty good. That could cover a few funeral expenses in case I decide to go sky-diving again.
Of course, they are always “proud” to be able to offer you more coverage at a rock bottom price. Additional covered for you is only $1 per month for each $10,000 of coverage. But wait, that makes my $1,000 of free coverage worth…. 10 cents a month Hmm, they must value me a lot to spare $1.20 a year for me…
As you might guess, the price isn’t that great. And again it only covers accidental death, so it’s not as comprehensive as traditional term life insurance. But it does cover dismemberment, and somehow my morbid sense of humor was amused by the dismemberment payouts. I can just imagine some actuary researching on how many people lose a thumb and index finger on the same hand. Just a thumb? They’ll be fine.
100% Benefit
Death 
Both Feet or Both Hands
Entire Sight of Both Eyes
One Hand and One Foot
One Hand and Sight of One Eye
One Foot and Sight of One Eye
Speech and Hearing
50% Benefit
One Hand or One Foot
Entire Sight of One Eye
Speech or Hearing
25% Benefit
Thumb and Index Finger on Same Hand
So, should I bother taking it? I’ll probably pass, but it is still free. If I add up all my offers over time I might eventually build up a nice bounty. Probably not worth giving up the personal information needed, though. Anyone else sign up?
April 4th, 2008 at 6:29 am
My car insurance company has also provided a complementary AD&D insurance as has bank of america. Pass…
April 4th, 2008 at 6:39 am
My bank did the same thing - I took my free coverage. I don’t remember having to give out personal information (probably was just pulled from the bank). But I haven’t noticed an increase in junk mail and (more important to me) there was no email address involved. But I’m also young and don’t have a term life policy yet, so any extra coverage is less of a drop in the bucket for me.
April 4th, 2008 at 6:39 am
Well they already have all your personal info so I don’t see a problem there. You might check if the master policy has a subordination clause. That means it pays after any other insurance. In practiality, that means that if you have more then one policy, it won’t pay anything.
April 4th, 2008 at 7:18 am
I signed up for something very similar to this, and was bombarded by junk mail for companies like Insurance.com
Not worth it for the hassle and the privacy concerns I have.
April 4th, 2008 at 7:45 am
I agree with Matt and Paratrooper, I have accepted 3 offers for $1K coverage. The “subordination clause” is something I hadn’t considered though.
April 4th, 2008 at 8:28 am
Didn’t take the coverage.
But now that you’re a homeowner, I’d love to read about what you two do for life insurance.
April 4th, 2008 at 8:49 am
Term Insurance is cheap, you can get half a million dollars (20yr) for around $20/mo if you are in your mid twenties. Really only one reason to get permenant; if you spend all your other money instead of investing it, then whole life has an ok cash value as a back-up plan.
April 4th, 2008 at 8:53 am
My husband got a really nice offer for $1MM worth of accidental D&D for 9.95 a month. He was working in home improvements at the time, so there’s definitely some danger. Anyway, we still have it (somehow this was thru JC Penney) and I guess it’s really not a bad deal. My first thought was that it wasn’t necessary, but you never know. It had the same kind of schedule as above (with the hands, feet and eyes). Yes, kind of weird to think about — how they break down your body parts, yechhh! We have regular term insurance too.
April 4th, 2008 at 9:23 am
Ya, I saw something recently from my credit union…….and I never jumped. But I was about as torn as I could be.
#1.) It’s my own CREDIT UNION!!! (I should be able to trust my credit union, no?)
#2.) The initial “free” amount was small…….BUT……was thru some insurance co. (obviously) and I was just wondering……my credit union’s trying to pitch me “insurance”. Banks use money to make money………they don’t sell insurance.
I was torn so I just shredded the offer. In the long run I went back to the old adage, “There’s no such thing as a free lunch!!!”
April 4th, 2008 at 10:03 am
I read the stipulations on one of those insurance policies once. I didn’t get the impression that the insurance company planned on making many pay outs on the plan. The restrictions probably let them deny a lot of claims that they get. This also explains why the cost of this insurance is so low. One of the things it will not cover is an accident involving an activity like sky-diving.
April 4th, 2008 at 10:29 am
@ Red,
Insurance is one of the best ways to make money - I’d be surprised if your CU wasn’t selling it!
What else can you sell to someone that they probably won’t use, all the while investing their money for your own profit??
True, the CU may have to pay out someday, but think how much they’ve accrued from interest earnings while your money was sitting in their account instead of your own!
April 4th, 2008 at 12:04 pm
BTW, the credit union is paying NOTHING and actually getting money to stuff it in the envelopes. They are trying to get you to sign up to the ‘additional’ insurance which is where they are making their money.
Personally, I just TODAY got mine from the credit union, $2000 for a year. But it’s free and I sign up for it each year so they have my information already. It’s nothing compared to my Term Life policy which I picked up years ago, but something is better than nothing.
April 4th, 2008 at 3:27 pm
AD&D is so cheap, because statistically your chances of having one of those is extremely low. Most advisors rec. just to carry enough life and disability insurance and forget the AD & D.
April 4th, 2008 at 8:19 pm
I consider any cause for me to die as accidental. I didn’t plan the heart attack, but for some reason I feel that having a heart attack would not be considered accidental.
April 5th, 2008 at 11:35 am
A heart attack is not accidental. I met a widow who husband died of a heart attack and the AD&D denied the claim stating that it was a natural cause of death.
April 5th, 2008 at 8:59 pm
They have to make it thumb and index finger on same hand b/c too many hard-pressed idiots out there decided that one little finger was worth less than the $10k or whatever their policy paid.
I sold accident insurance for several years… thankfully not anymore
April 6th, 2008 at 9:31 am
I think you were only kidding about the sky diving thing, but in most cases a sky diving death or injury probably isnt covered by most policies, in fact its usually listed as an example of an exception along with piloting a plane, and mountain climbing.
April 10th, 2008 at 9:34 am
how can a heart attack not be accidental? i thought anything other than suicide is accidental
my agency’s basic life insurance has this ad&d insurance included, it’s something like 50% of the basic life insurance amount for the 100% you have above, which is my salary+2k
April 10th, 2008 at 5:37 pm
Living in California, I know my chances of getting hit in automoible crash are more than than my chances of dying by any other cause. So, I took all of the $2,000 offers that I got from my 5 credit unions. I rejected the one I got from Bank of America. They’re free, after all. And, I don’t mind junk mail. I keep a trash can and shredder near my mail box. But, it’s been years and I haven’t noticed any increase in mail received.
One thing that should be noted is that if you get your coverage through a credit union, it’s most likely free and will be automatically renewed each year. But, if you get yours through a regular bank, it’s usually for a limited time and then they bill you for a small amount afterwards.
June 18th, 2008 at 6:56 am
AD&B is a good product if you cannot qualify for life insurance. It is also a good complimentary product to life insurance. A heart attack in these policies is indeed NOT accidental. That is considered a health-related issue. Anything health related is not included in AD&B. Otherwise, many people would be denied this type of policy.
August 5th, 2008 at 3:50 pm
I read things like how can a heart attach not be accidental? Easy. Direct Energy Weapons make your blood pressure go up and down untill you have a heart attack. These weapons can be bought on or through the internet. Keyword Direct Energy Weapons. Also there are herbs such as Foxglove that make your heart bloodpressure go up and down. I am sure there are also things I do not know about.