Final answer:
The incorrect statement among the options is that Accidental Death and Dismemberment coverage pays a benefit if the insured person is seriously injured in an accident. While AD&D does provide benefits for dismemberment, it does not cover all serious injuries, only specific ones like loss of limbs or senses.
Step-by-step explanation:
The statement concerning Accidental Death and Dismemberment (AD&D) coverage that is NOT correct is: Accidental Death and Dismemberment coverage pays a benefit if the insured person dies or is seriously injured in an accident. This statement is misleading because while AD&D does cover injury in an accident, it specifies coverage for dismemberment (loss of limbs or senses), not just any serious injury. Therefore, AD&D benefits are paid out specifically for accidental death or dismemberment but not for all types of serious injuries.
AD&D insurance acts as a financial safeguard in the unfortunate event of an accidental death or qualifying injury, such as the loss of a limb, sight, hearing, or speech. It is commonly added as a supplementary benefit to a standard life insurance policy, enhancing the coverage. However, unlike health insurance or comprehensive life insurance, AD&D does not cover deaths due to natural causes or illness, as it is solely focused on accidental circumstances.