California Life-Only & Accident and Health AgentLife InsuranceMedium
A life insurance policy has a face amount of $200,000. It also includes an Accidental Death Benefit rider, which is typically a multiple of the face amount. If the insured dies in an accident, and the rider pays 'double indemnity,' what would be the total death benefit paid to the beneficiary?
- A$400,000
- B$200,000
- C$600,000
- D$300,000
Show answer & explanationAnswer & explanation
Correct answer: A. $400,000
Double indemnity means the Accidental Death Benefit rider pays an additional amount equal to the policy's face amount. So, the beneficiary receives the original $200,000 face amount plus an additional $200,000 from the rider, totaling $400,000.
Why the other options are wrong
- B. This is only the face amount, without the rider benefit.
- C. This would be triple indemnity, or the face amount plus twice the face amount.
- D. This would be the face amount plus 50% extra, not double.
Accidental Death Benefit Rider (Double Indemnity)
A life insurance rider that provides an additional death benefit, typically equal to the policy's face amount (double indemnity), if the insured's death is a direct result of an accident, as defined in the policy.
- Pays additional death benefit for accidental death
- Often 'double indemnity' (2x face amount total)
- Death must be accidental, not natural causes
- Usually has age limits and exclusions (e.g., war, suicide)
Memory trick: Riders are 'add-ons' that enhance your policy's protection.