California Life-Only & Accident and Health AgentLife InsuranceEasy
A life insurance policy has a face amount of $200,000. It also includes an Accidental Death Benefit (ADB) rider, sometimes known as 'double indemnity.' If the insured dies due to an accidental cause as defined in the rider, how much would the beneficiary receive?
- A$100,000
- B$400,000
- C$200,000
- D$300,000
Show answer & explanationAnswer & explanation
Correct answer: B. $400,000
An Accidental Death Benefit (ADB) rider, or 'double indemnity,' typically pays an additional death benefit equal to the policy's face amount if the insured's death is due to an accident. Therefore, the beneficiary would receive the face amount ($200,000) plus the additional accidental death benefit ($200,000) for a total of $400,000.
Why the other options are wrong
- A. This would be half the face amount, which is incorrect.
- C. This is just the face amount without the accidental death benefit.
- D. This would be the face amount plus 50% extra, which is not typical for a 'double indemnity' rider.
Accidental Death Benefit (ADB) Rider
A life insurance rider that provides an additional death benefit, typically equal to the policy's face amount (double indemnity), if the insured dies as a direct result of an accident, subject to policy definitions and exclusions.
- Pays an additional death benefit.
- Death must be accidental as defined by the rider.
- Often called 'double indemnity' (pays twice the face amount).
- Subject to specific exclusions (e.g., illness, suicide, war).
Memory trick: ADB: Accidentally Double the Benefit!