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September 1989, Vol. 112, No. 9
Compensation for death and dismemberment
With the potential for incurring lost wages and large medical bills, accidents can create severe financial hardships for employees. To address these risks, employers may include accidental death and dismemberment (AD&D) policies as part of an employee benefits package. In this regard, AD&D benefits are a common feature of life insurance plans.
In 1988, 92 percent of full-time employees in medium and large private firms participated in life insurance plans, and 76 percent of those workers had AD&D benefits. (Less than 0.5 percent of employees had AD&D coverage without regular life insurance.) Unlike life insurance, AD&D insurance provides payment only for losses resulting from an accident-usually for injuries occurring on or off the job. In instances of accidental death, benefits are paid in addition to regular life insurance coverage and, in the large majority of cases, are equal to the regular benefit. For this reason, AD&D is sometimes called a "double-indemnity" benefit.1
Data in this article are from the 1988 Bureau of Labor Statistics survey of benefits for full-time employees in medium and large private firms. Information was obtained from a sample of 2,500 establishments representing approximately 107,000 business establishments employing 31 million full-time workers.2 Data are published for all types of workers combined and separately for three broad occupational groups: professional and administrative, technical and clerical, and production and service employees. The first two groups are often combined and labeled white-collar workers, in contrast to the blue-collar workers constituting the third group.
This excerpt is from an article published in the September 1989 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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1 The policy of paying benefits for accidental death than for natural death is debated in Leonard L. Berekson, "Group Accidental Death Benefits: An Inherent Contradiction," Benefits Quarterly, First Quarter 1985, pp. 65-68.
2 Key findings of the 1988 survey are reported in Employee Benefits in Medium and Large Firms, 1988, Bulletin 2336 (Bureau of Labor Statistics, 1989). In addition to examining life insurance and accidental death and dismemberment plans, the survey explores the incidence and detailed characteristics of health, short-term disability, and long-term disability insurance; retirement and capital accumulation plans; and a variety of paid time-off items. It also reports on eligibility for numerous other benefits.
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