CARD T143
Accidental Death Benefit Rider
A rider paying an additional benefit for a qualifying accidental death. Not every death qualifies as accidental under the policy.
How it works
An accidental-death benefit pays an additional amount when death results from a covered accident and meets the rider’s cause, timing, age, and exclusion requirements. “Double indemnity” describes an additional benefit equal to the base benefit when the rider provides that amount. Some exam examples specify death within 90 days; do not treat 90 days as a national rule. For example, Washington’s current AD&D filing requirements require at least one year for a covered loss to occur. [11] [14] [19]
A $100,000 base policy and $100,000 accidental-death rider can pay $200,000 for a death qualifying under both. Death from an excluded accidental cause may fail the rider even if the base policy still pays.
An accident is not enough by itself: the death must satisfy the rider’s causal connection and other requirements.
CARD T144
Accidental Death and Dismemberment (AD&D)
Coverage paying scheduled benefits for qualifying accidental death or specified losses, such as loss of a limb. The policy defines covered losses.
How it works
Accidental death and dismemberment coverage pays scheduled benefits for covered accidental death or specified losses, such as a limb or sight. It may be a rider or separate coverage. The principal sum often refers to the full scheduled amount; a specified single loss may pay a percentage. The actual schedule, exclusions, and time limits govern—there is no universal percentage for every injury. [14] [19]
An AD&D schedule states a $100,000 principal sum and 50% for a covered loss of one hand. That qualifying loss pays $50,000.
AD&D is not comprehensive medical insurance or a guarantee of wage replacement for every disability.
Practice Accidental Death and Dismemberment (AD&D) · 3 questions
CARD T145
Accelerated Death Benefit
A feature paying part of the death benefit while the insured lives after a qualifying event. Amounts advanced generally reduce the remaining death benefit.
How it works
An accelerated death benefit allows part of the life policy’s death benefit to be paid while the insured is alive after a qualifying event, such as terminal illness. Eligibility, fees, discounts, and the reduction in remaining death benefit follow the policy. This is generally an advance of existing coverage, not an extra death benefit. Certain qualifying accelerated benefits receive favorable federal tax treatment, but not every living-benefit payment has identical tax treatment. [11] [15]
In a simplified dollar-for-dollar arrangement, a $200,000 death benefit is reduced by a $50,000 advance, leaving $150,000 before other changes. Actual riders may calculate the reduction differently.
Acceleration keeps the arrangement with the insurer. A viatical settlement sells the policy to another party.
APPLY THE TERMS
Practice questions
Select an answer, then check it to see why each option is right or wrong.
T143 · Accidental Death Benefit Rider
0 of 3 answered
T144 · Accidental Death and Dismemberment (AD&D)
0 of 3 answered
T145 · Accelerated Death Benefit
0 of 3 answered
Sources & further reading
Original explanations and practice scenarios informed by the following regulatory, legal, and product resources. State examples are not presented as nationwide deadlines or requirements.