What does double indemnity refer to in life insurance?

Double indemnity in life insurance refers to the provision that allows for the payment of double the face value of the policy if the insured person dies as a result of an accident, rather than from other causes. This clause is designed to enhance the benefits of life insurance policies, especially for scenarios that carry higher risks.

The additional payment encourages individuals to take out insurance, as it provides added financial security for beneficiaries in the event of an accidental death. This can be particularly appealing to policyholders who are engaged in activities or occupations deemed higher-risk, as it provides peace of mind knowing that their loved ones would receive a larger benefit in such unfortunate circumstances.

Other options presented might confuse the concept of how payouts are structured in life insurance. For instance, only paying half the face value for accidental death does not capture the essence of the double indemnity clause. Similarly, paying premiums twice or waiving premiums after a claim does not relate to the core definition of this insurance provision.