Final answer:
An accidental death benefit is an additional component of a life insurance policy that pays a lump sum to beneficiaries in case of the policyholder's accidental death. It adds an extra layer of financial protection above the death benefit provided by policies like cash-value (whole) life insurance.
Step-by-step explanation:
The benefit that provides a fixed lump-sum benefit in addition to life insurance benefits when death is accidental is known as an accidental death benefit. This is a type of additional coverage attached to a life insurance policy which is designed to provide financial security to the policyholder's beneficiaries in case of an accidental death. Policies such as cash-value (whole) life insurance not only offer a death benefit but also have a cash value component that accumulates over time and which the policyholder can use for various needs.
Insurance serves as a method of protecting an individual from financial loss. Policyholders typically make regular payments, known as premiums, to an insurance entity. If a policyholder suffers significant financial damage from an event covered by the policy, like an accidental death, the insurance firm is responsible for compensating the insured person or their beneficiaries.