An accidental death benefit rider provides an additional death benefit when the insured dies as the direct result of a covered accident. It is often described as “double indemnity” when the additional benefit equals the policy’s face amount, although the actual amount and conditions depend on the rider. The rider supplements the base life policy; it does not replace the base death benefit. If the insured dies from a covered accident, the beneficiary may receive the base policy amount plus the rider benefit. If death results from illness or a noncovered cause, only the base policy benefit is generally payable.
Accidental-death riders contain important limitations. They typically require death to occur within a stated time after the accident and may exclude deaths resulting from specified causes, such as war, suicide, certain hazardous activities, intoxication, or illegal acts, depending on the contract. The producer must explain that the benefit is conditional and is not the same as comprehensive life insurance.
A guaranteed-insurability rider permits future coverage increases without new evidence of insurability. A cost-of-living rider increases coverage under specified inflation-related terms. A return-of-premium feature returns qualifying premiums under stated conditions, usually at the end of a term period.
References/topics from the Study Guide: Accidental Death Benefit Rider; Double Indemnity; Exclusions; Supplementary Benefits; Policy Riders.
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