Contacts
Many employers offer Voluntary Term Life insurance and Voluntary Accidental Death & Dismemberment (AD&D) insurance as a part of their employee benefits package. But are you confident your employees understand the difference between the two? AD&D is relatively inexpensive in comparison to term life insurance. On a group basis, you can often find AD&D rates under three cents per $1,000 of coverage, whereas most group term life rates start at double that. When rates are age based, the cost difference between group term life insurance and AD&D is even more apparent.
Some employees may be tempted to “load up” on AD&D for the very reason that the premiums are so comparatively low. Before making that choice, employees should consider the following:
- AD&D only pays the full schedule amount in the event the death is due to an accident.
- Death by sudden illnesses, such as a heart attack or stroke, are certainly unexpected but are not accidents. Simply put, death by heart attack is not payable under AD&D.
- Comparing the top 10 causes of death in 2017, accidents were responsible for just six percent of deaths(1), with males having a higher percentage of deaths in this category than females (see Figure 1).
However, age plays a significant factor on cause of death(2).An individual’s odds of dying by accident (i.e. unintentional injuries) drops dramatically from age cohort 25-44 (34.6%) vs. age 45-64 (8.8%).As one may expect, the two leading causes of death in the 45-64 age category are Cancer (28.4%) and Heart Disease (20.8%) respectively(3).Deaths caused by cancer and heart disease are not payable by AD&D policies.
Age group |
% deaths caused by Unintentional Injuries |
1-9 |
31.8% |
10-24 |
40.6% |
25-44 |
34.6% |
45-64 |
8.8% |
65 & over |
2.7% |
What employers can do to help
Some employees may rely too heavily on AD&D coverage without understanding the implications of that choice. Focus on your plan design and employee education to help bridge that knowledge gap.
Focus on your Plan Design. Ask yourself: How do you want your voluntary life and AD&D policies structured? Do you want employees to be able to elect Voluntary Life and AD&D independently of one another? There are pros and cons to all scenarios:
- Pros: This offers the most benefit choice for employees.
- Cons: Lots of choice isn’t always the best strategy; are employees potentially over insuring on AD&D without understanding when AD&D will pay.
Conversely, should you administer your plan so that employees are making a single Voluntary Life and AD&D election? Does your benefits administration system have a limitation on the plan design it can accommodate?
- Pros: This choice is arguably the simplest to administer and communicate.
- Cons: This arrangement offers little flexibility for employees in different life stages to adjust life and AD&D coverage based on their individual needs.
Don’t overlook employee education as a solution. Regardless of the plan design arrangement you choose, employee education is key. Be sure it’s clear in your enrollment and education materials exactly what the differences are between AD&D and life insurance. Consider doing a few drip campaigns in the weeks leading up to your annual enrollment. As with every important decision, it’s critical that employees take their lifestyles and life stages in to consideration as they are prioritizing their insurance spend.
Need more assistance?
Your Marsh & McLennan Agency team is available to help you with both plan design recommendations and employee education. Reach out to your local MMA Employee Health & Benefits consultant for assistance.
1 Heron Ph.D., Melonie. “Deaths: Leading Causes for 2017.” National Vital Statistics Reports, vol. 68, no. 6, 2019, p9.
2 Ibid, p11.
3 Ibid.
Related Offerings
Employee Health & BenefitsYou May Also Be Interested In
- Event
01.20.2021
Webinar | New Developments in the Classification of Workers
- Event
01.27.2021
Webinar | The New Norm: Maintaining Productivity While Working From Home
- Event
02.09.2021
Webinar | 1+2=5? Understanding Your Benefits Cafeteria Plan
- Blog
01.14.2021
Benefits News and Views
- Event
01.13.2021
Webinar | Leave of Absence and Return to Work Issues in the Era of COVID-19
- Blog
12.31.2020
WellConnected Resources
- Event
12.17.2020
Webinar | Year End Checklist 2020 and Future Forecast 2021
- Event
11.19.2020
Webinar | ACA Reporting Requirements 2020
- Event
11.12.2020
Webcast | 2020 Election Results: The Impact to Benefit Plans
- Blog
11.12.2020
Live Well Work Well Newsletters
- Event
10.21.2020
Webinar | Telemedicine: Permanent Solution or Temporary Fix
- Event
10.15.2020
Webinar | Health Savings Accounts 2020
- Blog
10.14.2020
INSIGHTS Newsletter
- Event
10.08.2020
Lunch & Learn: Take Charge Health
- Blog
09.24.2020
DOL Issues New FFCRA Leave Guidance
- Event
09.17.2020
Webinar | FMLA and Employee Benefits 2020
- Event
09.15.2020
Webcast | Benefit Administration: State of the Market
- Blog
08.21.2020
Open Enrollment Going Virtual
- Event
08.20.2020
Webinar | Compliance Considerations When Self-Insuring 2020
- Event
07.22.2020
WEBINAR | Next Chapter: Massachusetts Family Leave Act 2021
- Event
07.21.2020
Webcast | Senior Care - The New Normal
- Event
07.16.2020
Webinar | Annual Required Notices 2020
- Event
06.25.2020
Webinar | Paycheck Protection Program- Q & A Town Hall
- Event
06.17.2020
Webinar | Financial Wellbeing: Essential to the Health of Your Employees
- Blog
06.17.2020
National Safety Month: Check Your Safety Lens with a safety perception survey
- Blog
06.16.2020
Connecting with Your Five Employee Demographics
- Event
05.21.2020
Webinar | COBRA 2020
- Event
05.19.2020
Webinar | Legal and Compliance Return to the Workplace: Considerations for Employers
- Event
04.30.2020
Webcast | COVID-19: Managing the Impact- Weekly Update 4.30.20
- Blog
04.28.2020
Employee Mental Health: More Vulnerable Than Ever During the COVID-19 Crisis
- Blog
04.20.2020
Diversity and Inclusion and the Battle for Talent
- Event
04.16.2020
Webcast | COVID-19: Managing the Impact- Weekly Update 4.16.20
- Event
04.09.2020
Webcast | COVID-19: Managing the Impact- Weekly Update 4.9.20
- Event
04.02.2020
Webcast | Update on COVID-19: Navigating the Coronavirus and Managing the Impact
- Event
03.30.2020
WEBCAST | Employee Benefits & 401K Compliance During The Coronavirus Outbreak
- Event
03.24.2020
Webinar | Navigating the Coronavirus and Managing the Impact
- Event
03.12.2020
Webinar | The Power of Food
- Event
01.23.2020
Seminar | Employment Law Landscape 2020
- Blog
01.16.2020
Employee Health & Benefits 2020 and Beyond
- Event
12.19.2019
Webinar | Year End Checklist and Future Forecast
- Blog
12.09.2019
Employee Benefits and Perks – Life Science Industry Raises The Bar
- Blog
12.05.2019
Financial Wellness
- Blog
12.03.2019
Building the Foundation for a Successful Implementation
- Event
11.21.2019
Webinar | ACA Reporting Requirements
- Blog
11.05.2019
Before the Turn of the Decade: Important Reminders Regarding Employee Benefits
- Event
10.17.2019
Webinar | Health Savings Accounts
- Blog
10.07.2019
4 Ways to Improve Open Enrollment
- Event
09.19.2019
Webinar | New HRA Options
- Event
09.12.2019
Webinar | New Developments with HRAs and 2020
- Blog
09.10.2019
5 Employee Wellness Initiatives That Work
- Event
08.15.2019
Webinar | Association Health Plans
- Blog
08.02.2019
Podcast | Choosing Your Broker
- Blog
08.01.2019
Wearable Health Care Technology: Fashion Fad or the Future?
- Event
07.18.2019
Webinar | Annual Required Notices 2019
- News
06.21.2019
MMA Midwest Named Second Largest Dayton-Area Employee Benefits Company
- Event
06.20.2019
Webinar | Mid-Year Compliance Review
- Blog
06.20.2019
A New Era of Employee-Centric Work Perks
- Event
05.29.2019
Seminar | Pharmacy - Everyone's talking about it, but what can I do?
- Event
05.16.2019
Webinar | Wellness Programs
- Blog
04.26.2019
Massachusetts Releases New Guidance and Employee Notice Template For Massachusetts Paid Family and Medical Leave (PFML)
- Event
04.25.2019
Webinar | Total Worker Health
- Event
04.18.2019
Webinar | HIPAA Privacy & Security Training
- Blog
04.11.2019
Approaching Healthcare Benefits Strategically
- Blog
04.11.2019
April is National Wellness Month
- Event
03.21.2019
Webinar | Federal Continuation Coverage
- Blog
03.15.2019
Five Ways Employee Benefits Are Advantageous for Smaller Businesses
- Event
02.21.2019
Webinar | FMLA & Employee Benefits
- Event
01.29.2019
Employment Law Landscape 2019
- Event
01.17.2019
Webinar: ACA Reporting Requirements
- Blog
01.16.2019
Understanding the Changes to Minnesota’s Whistleblower Act
- Blog
01.10.2019
2019: What to Expect in Employee Health & Benefits
- Event
12.20.2018
Webinar | 2018 Year in Review & Future Benefits Forecast
- Blog
12.20.2018
Making a List and Checking It Twice
- Event
12.14.2018
Webinar | Q4 2018 Health Care Reform Update
- Blog
12.12.2018
Can Telemedicine Make Health Care Benefits Healthier?
- Blog
12.03.2018
Employment Law Update: Minimum Wage Keeps Climbing
- Blog
11.29.2018
IRS Increase Health FSA Contribution Limit for 2019 & Adjusts Other Benefit Limits
- News
11.29.2018
Engaging Your Employees Requires Your Own Engagement
- Event
11.20.2018
Webinar | Back to Basics: Consumer-Based Plans 101
- Blog
11.08.2018
Four Steps Employers Can Take to Help Alleviate the Opioid Crisis
- Blog
11.02.2018
Compliance Update: HRAs Poised For a Facelift
- Blog
11.02.2018
Build a Positive Workplace Culture That Promotes Honest Communication
- Blog
10.25.2018
The Impact of Stress in the Workplace
- Event
10.18.2018
Webinar | Annual Required Notices
- Event
10.12.2018
Webinar | Q3 2018 Health Care Reform Update
- Blog
10.09.2018
IRS Releases Final 2018 ACA Reporting Forms and Instructions
- Blog
10.05.2018
What are the Government's Plans to Solve the Opioid Problem?
- Event
09.18.2018
The Opioid Epidemic: A Public Health Crisis
- Blog
09.17.2018
Is Marijuana the Answer to the Opioid Addiction Problem?
- Blog
09.12.2018
Compliance Update: Medical Loss Ratio Rebates Under the Affordable Care Act
- Blog
09.11.2018
2018 Stop-Loss Survey
- Event
09.06.2018
Webinar | Association Health Plans
- Blog
09.06.2018
Rule #1 For Effective Open Enrollment: Start Early
- Blog
08.21.2018
Tobacco: Still Affecting Businesses’ Financial Health
- Blog
08.17.2018
Open Enrollment: Ways to Control Costs
- Event
08.16.2018
Webinar | Surviving a DOL Audit
- Blog
08.07.2018
Open Enrollment: The Benefits of Smarter Communications
- Blog
08.06.2018
The Opioid Crisis: Using Alternative Approaches to Manage Pain
- Blog
07.25.2018
Is An EAP Worth The Investment?
- Blog
06.29.2018
The DOL's New Association Health Plan Rules and What They Actually Mean
- Event
06.21.2018
Webinar | 2018 Mid-Year Compliance Update
- Blog
05.30.2018
The Opioid Crisis: A Serious Societal and Business Issue
- Blog
12.27.2017
Employee Benefits in 2018
- Blog
10.13.2017
Telemedicine and HSAs
- Blog
10.06.2017
Data Breach Risks During Annual Enrollment
- Blog
09.26.2017
Annual Enrollment
- Event
03.14.2017
The Future of Health Care & Employee Benefits