Question

What does double indemnity refer to?

a) Dishonesty on the application, which can invalidate the claim
b) A provision that says if the insured dies in an accident, the death benefit paid out is doubled
c) If the insured is a victim of a violent crime and the beneficiary was involved in the crime
d) If the insured dies in an accident, the insurance company will not pay if the beneficiary was involved in the accident

Answer 1

Double indemnity is a life insurance policy clause that doubles the payout if the insured dies due to an accident. It provides additional protection to beneficiaries and is activated under certain conditions specified in the policy.

Step-by-step explanation:

Double indemnity refers to a provision in a life insurance policy that doubles the payout in the event that the insured's death is caused by an accident. This is a specific type of benefit that is above the standard death benefit within a life insurance policy. It is designed to provide additional financial protection to the beneficiaries under more tragic and unexpected circumstances. Therefore, the correct answer to the question is (b) A provision that says if the insured dies in an accident, the death benefit paid out is doubled.

Insurance is a method of protecting a person from financial loss by having policyholders make regular payments to an insurance entity. The insurance firm then compensates a group member who suffers significant financial damage from an event covered by the policy. This arrangement can help to better manage the financial consequences of unpredictable events, such as the untimely death of the insured due to an accident, thus triggering the double indemnity clause.

It's important to note that for the double indemnity clause to be invoked, the insured individual's death must meet specific criteria defined within the policy, such as being the direct result of an accident and occurring within a particular time frame from the date of the accident.