Unit 19

Question 1

The amount payable as a death benefit in an accidental death and dismemberment policy is known as the:

(A) primary amount
(B) capital sum
(C) indemnity amount
(D) principal sum

Answer 1

(D) principal sum

Question 2

Theodore received a $15,000 cash benefit from his $50,000 accidental death and dismemberment policy for the accidental loss of one eye. The amount he received could be identified as the policy’s:

(A) principal sum
(B) secondary sum
(C) capital sum
(D) contingent amount

Answer 2

(C) capital sum

Question 3

Which of the following examples pertaining to accidental death and dismemberment insurance is CORRECT?

(A) Merrill is the insured under a $50,000 AD&D policy and dies unexpectedly of a heart attack. His beneficiary will receive $50,000 as the death benefit.
(B) Linda has a $40,000 AD&D policy that pays triple indemnity. If she should be killed in a train wreck, her beneficiary would receive $120,000.
(C) Paula has an AD&D policy that pays $15,000 for the loss of one hand or foot or the sight of one eye. That benefit is called the principal sum.
(D) Eric has an AD&D policy. He is killed in an auto accident. The $30,000 his beneficiary receives as a death benefit is the policy’s capital sum.

Answer 3

(B) Linda has a $40,000 AD&D policy that pays triple indemnity. If she should be killed in a train wreck, her beneficiary would receive $120,000.

Question 4

Agnes purchases a round-trip travel accident policy at the airport before leaving on a business trip. Her policy would be which type of insurance?

(A) Limited risk
(B) Business overhead expense
(C) Credit accident and health
(D) Industrial health

Answer 4

(A) Limited risk