Massachusetts Health & Accident Insurance Practice Exam

What happens to the face amount of life insurance under the Accidental Death Benefit Rider?

1. it remains unchanged

2. it decreases

3. it doubles if death is accidental

4. it is halved for policy loans

The correct answer is: it doubles if death is accidental

The Accidental Death Benefit Rider provides an additional benefit to the policyholder's beneficiaries in the event of the insured's accidental death. When this rider is attached to a life insurance policy, it typically stipulates that if the insured dies as a direct result of an accident, the face amount of the life insurance policy will effectively double. This means that the beneficiaries receive the standard death benefit plus an additional sum designated by the rider. This enhancement is designed to offer extra financial support during an unfortunate event, recognizing that accidental deaths can create specific financial burdens. The rider does not affect the base terms of the life insurance policy regarding non-accidental death, ensuring that the original coverage remains intact in those circumstances. Thus, the benefit clearly correlates with accidental deaths, which is why the correct answer reflects the doubling of the face amount under such conditions.