Texas Life Agent Practice Exam

If a customer dies from cancer while having a $25,000 life insurance policy with an Accidental Death Benefit rider, how much will be paid out?

1. $25,000

2. $50,000

3. $0

4. $12,500

The correct answer is: $25,000

The correct payout in this scenario is $25,000. A life insurance policy, such as the one mentioned, typically covers death due to natural causes, including illnesses like cancer. In this case, since the death resulted from cancer, which is classified as a natural cause, the beneficiary will receive the face value of the policy, which is $25,000. The Accidental Death Benefit rider is designed to provide an additional payout in cases of accidental death, which does not apply here since cancer is not considered an accident. Therefore, the presence of such a rider does not increase the benefit when death results from a non-accidental cause like cancer.