Kentucky Health Insurance Practice Exam

Under the Accidental Death and Dismemberment coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death?

1. Double the amount of the death benefit

2. Refund of premiums

3. Principal sum

4. Capital sum

The correct answer is: Principal sum

In the case of Accidental Death and Dismemberment (AD&D) coverage, the benefit paid to the beneficiary upon the insured's accidental death is known as the principal sum. This principal sum typically represents the amount of coverage specified in the policy, which is designed to provide financial support to the beneficiary in the event of such an unexpected tragedy. AD&D insurance often differentiates between the principal sum and the capital sum, where the capital sum applies to specific body parts that may be lost (such as arms or legs) due to an accident. While the capital sum is significant for dismemberment claims, it is the principal sum that is activated in the event of death from an accident. Therefore, the correct answer is the principal sum, as it directly correlates with the specified death benefit in an accidental death scenario.