Short answer: Group term life insurance pays a benefit to your beneficiary if you die while covered (often 1–2Ă— salary as employer-paid “basic,” plus optional employee-paid amounts). AD&D pays a separate benefit only for death or specified injuries caused by an accident; it’s much narrower and is not a substitute for life insurance.
Group term life insurance provides a death benefit to your named beneficiary if you die while covered. It’s “term” coverage, so it has no cash value and generally ends when your employment ends (though plans often allow you to convert or port it). Employers commonly pay for a “basic” amount (such as one or two times salary) and let employees buy additional voluntary coverage. One tax note: employer-paid group term life over $50,000 creates a small amount of taxable “imputed income.”
AD&D (Accidental Death & Dismemberment) is different. It pays only when death or a specified serious injury, such as loss of a limb, sight, hearing, or speech, results from a covered accident. It pays nothing for death from illness, and dismemberment benefits are paid as a percentage of the policy amount according to a schedule.
The two are often bundled (“Basic Life and AD&D”), but they shouldn’t be confused: life insurance covers death from almost any cause, while AD&D is accident-only and should be thought of as a supplement, not your primary life coverage.
Sources
- General group life/AD&D reference; IRC §79 (imputed income on employer-paid group term life over $50,000). Flagged research gap in the Employee Benefits KB. Verify specifics before CE use.
Content history
Originally published: June 16, 2026
Last reviewed: June 16, 2026