Question

Question 9 of 15

The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive?
A$0
B$50,000 (50% of the policy value)
C$100,000
D$300,000 (triple the amount of policy value)
Incorrect! The triple indemnity accidental death rider obligates the company to pay three times the face amount of the policy if the insured dies as a result of an accident. The death must be accidental and not contributed to by any other factors and must occur within 90 days of the accident. In this case, since the insured contributed to his own death, the triple indemnity rider is void, but the beneficiary will still receive the policy's death benefit.

Answer 1

In the case of the insured individual at fault in an accident, the triple indemnity rider would not apply, as the terms of this rider stipulate that the insured's death must not be contributed to by their actions. The beneficiary would still receive the base death benefit of the policy, which is $100,000.

Step-by-step explanation:

The question pertains to how a life insurance policy with a triple indemnity rider would pay out given that the insured was at fault in an accident that led to their death. In insurance policies, specific conditions dictate when a policyholder's beneficiaries can receive compensation. In the scenario provided, although the insured has a $100,000 policy with a triple indemnity for accidental death, the rider specifies that such a benefit is only payable if the insured's death was not contributed to by their own actions. As the accident was indeed the policyholder's fault, the triple indemnity is void. However, this does not affect the base policy payout, which means that the policy's original death benefit of $100,000 is still to be paid to the beneficiary.

Insurance often has various clauses that may provide additional benefits, such as triple indemnity riders for accidental death, but these often have strict criteria for payment. This is similar to other forms of insurance coverage, where payouts are contingent upon specific triggering events like car damage, medical expenses, or property burglary, as long as these events meet the terms of the policy.