Texas Life Agent Practice Exam

If the insured dies due to an accident three years into a policy with a Triple Indemnity clause, what would the beneficiaries likely receive?

1. $10,000

2. $30,000

3. $3,000

4. Nothing, as it lapsed

The correct answer is: $10,000

To determine what the beneficiaries would likely receive if the insured dies due to an accident while having a Triple Indemnity clause, it's important to understand the implications of such a clause. A Triple Indemnity clause means that, in the event of accidental death, the life insurance payout is multiplied by three. Assuming the base benefit of the policy is $10,000, under the Triple Indemnity clause, the beneficiaries would receive three times that amount in case of accidental death. Therefore, the payout in this scenario would be $30,000. In this context, the correct option indicates what is typically paid out under the terms of the policy when a qualifying event occurs. Given that the insured died due to an accident while the policy is active and no issues like lapsing are evident in the scenario, the beneficiaries would be entitled to the multiplied benefits as stipulated in the policy terms. This means that the understanding of indemnity clauses and the conditions under which they pay out is crucial for determining life insurance benefits in cases of accidental deaths. In this case, beneficiaries would receive a significant amount due to the presence of the Triple Indemnity clause.