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LEGAL DICTIONARY

Double Indemnity

What Is Double Indemnity?

Many life insurance and accident policies include a double indemnity clause or provision. The clause is related to the insurance term “indemnity,” which means that one party will provide financial compensation to another party after a loss.

Double indemnity insurance means that the life insurance company pledges to pay the beneficiary twice the coverage amount if the policyholder has an accidental death. For instance, if someone who has a life insurance policy with a $500,000 payout dies in an accident, the policy will pay $1,000,000 under the double indemnity clause.

This type of coverage can be added to standard, group, and travel life insurance contracts for an additional premium. However, since the rate of accidental deaths is low in the U.S. –about five percent of all deaths– it can be an affordable option for life insurance policyholders.

What Are the Qualifications for Double Indemnity?

The word “accidental” is critical to seeking compensation through a double indemnity policy. Death due to natural causes –like a heart attack or cancer– will not be eligible for double indemnity. The following events may qualify as accidental deaths under a double indemnity policy:

  • Motor vehicle accidents
  • Boating accidents
  • Accidental drowning
  • Slip and fall accidents
  • Choking or suffocation
  • Medical malpractice
  • Exposure to toxic substances
  • Workplace accidents
  • Defective machinery accidents
  • Murder

Sometimes the cause of an accidental death seems obvious. However, the insurance company is entitled to obtain proof that the death was accidental before paying out benefits. The insurance company often will seek evidence from the following sources:

  • Police reports
  • Eyewitness statements
  • Coroner’s report
  • Hospital records
  • Toxicology reports
  • Autopsy report

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What Double Indemnity Claims May Be Denied?

People considering purchasing a double indemnity provision for their life insurance policy should carefully review the wording. Qualifying causes of accidental death may differ by insurer.

Insurance companies evaluate double indemnity claims on a case-by-case basis. Here are situations surrounding a death that will come under extra scrutiny:

  • Death occurring with an existing medical condition
  • Death from a self-inflicted injury
  • Death from a drug overdose
  • Death from a car accident when not wearing a seatbelt
  • Death while attempting or committing a felony
  • Death occurring while performing a dangerous job
  • Death occurring due to the insured’s negligence or recklessness
  • Death occurring while under the influence of drugs or alcohol
  • Death due to surgery or other medical procedure (not caused by medical malpractice)
  • Death occurring during extreme or dangerous activities (such as mountain climbing, skydiving. or bungee jumping)
  • Death occurring in a war-torn area

On the other hand, policyholders (beneficiaries) can challenge an insurance company in court for a denied double indemnity claim. In this circumstance, the insured and their attorney would claim a breach of contract and would need to provide evidence and testimony to show that a death was accidental.

Helpful Resources:

ICA Insurance - What is “Double Indemnity”?

NCBI - Double Indemnity: Making Sense of the US Settlement

The Economics Daily - Features of life insurance plans

What Is Double Indemnity?

Many life insurance and accident policies include a double indemnity clause or provision. The clause is related to the insurance term “indemnity,” which means that one party will provide financial compensation to another party after a loss.

Double indemnity insurance means that the life insurance company pledges to pay the beneficiary twice the coverage amount if the policyholder has an accidental death. For instance, if someone who has a life insurance policy with a $500,000 payout dies in an accident, the policy will pay $1,000,000 under the double indemnity clause.

This type of coverage can be added to standard, group, and travel life insurance contracts for an additional premium. However, since the rate of accidental deaths is low in the U.S. –about five percent of all deaths– it can be an affordable option for life insurance policyholders.

What Are the Qualifications for Double Indemnity?

The word “accidental” is critical to seeking compensation through a double indemnity policy. Death due to natural causes –like a heart attack or cancer– will not be eligible for double indemnity. The following events may qualify as accidental deaths under a double indemnity policy:

  • Motor vehicle accidents
  • Boating accidents
  • Accidental drowning
  • Slip and fall accidents
  • Choking or suffocation
  • Medical malpractice
  • Exposure to toxic substances
  • Workplace accidents
  • Defective machinery accidents
  • Murder

Sometimes the cause of an accidental death seems obvious. However, the insurance company is entitled to obtain proof that the death was accidental before paying out benefits. The insurance company often will seek evidence from the following sources:

  • Police reports
  • Eyewitness statements
  • Coroner’s report
  • Hospital records
  • Toxicology reports
  • Autopsy report

Start Your Free Advance Directive Form Now

What Double Indemnity Claims May Be Denied?

People considering purchasing a double indemnity provision for their life insurance policy should carefully review the wording. Qualifying causes of accidental death may differ by insurer.

Insurance companies evaluate double indemnity claims on a case-by-case basis. Here are situations surrounding a death that will come under extra scrutiny:

  • Death occurring with an existing medical condition
  • Death from a self-inflicted injury
  • Death from a drug overdose
  • Death from a car accident when not wearing a seatbelt
  • Death while attempting or committing a felony
  • Death occurring while performing a dangerous job
  • Death occurring due to the insured’s negligence or recklessness
  • Death occurring while under the influence of drugs or alcohol
  • Death due to surgery or other medical procedure (not caused by medical malpractice)
  • Death occurring during extreme or dangerous activities (such as mountain climbing, skydiving. or bungee jumping)
  • Death occurring in a war-torn area

On the other hand, policyholders (beneficiaries) can challenge an insurance company in court for a denied double indemnity claim. In this circumstance, the insured and their attorney would claim a breach of contract and would need to provide evidence and testimony to show that a death was accidental.

Helpful Resources:

ICA Insurance - What is “Double Indemnity”?

NCBI - Double Indemnity: Making Sense of the US Settlement

The Economics Daily - Features of life insurance plans