Practice Quiz

Health and Life Insurance

Category - Annuities & Policies

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What is double indemnity?
  1. An additional amount of insurance to be paid to the beneficiary if the death of the insured is the result of an accident
  2. An additional amount of insurance to be paid to the company in case of an accidental death
  3. If the death of the insured is the result of a riot, insurrection, war, or crime, double indemnity voids the policy
  4. The prevention of the insured from engaging in work for profit. Double indemnity voids the policy if the insured cannot work.
Explanation
Answer: A - Double indemnity is an additional amount of insurance to be paid to the beneficiary if the death of the insured is the result of an accident. When the insured adds an accidental death benefit rider, the amount paid by the rider is usually the same as the face value of the policy. Although referred to as double indemnity, the amount can be three or more times the face value.
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