Accidental death and dismemberment insurance (AD&D) is also known as personal accident insurance (PAI). An AD&D policy provides a lump-sum payment to you or your beneficiaries if you’re involved in an accident that results in your death or a permanent injury that’s specifically covered in your policy.
AD&D policies do not cover illnesses, or accidental injuries that aren’t specifically covered by the policy. Typically, AD&D policies cover death, loss of vision, hearing, or speech, paralysis, or loss of a limb. The maximum payout is the face value of the policy, which is paid to the plan member’s beneficiaries if the accident results in death.
A specified percentage of that amount (for example, 25 percent or 50 percent) would be paid for things like loss of eyesight or loss of a leg.