Legal Definitions - double indemnity

Double indemnity refers to a specific clause found in some insurance policies, most commonly life insurance. This clause stipulates that the insurance company will pay out twice the policy's face value (the standard coverage amount) if the insured person's death occurs under certain specified conditions. These conditions almost always involve an accidental death, and the clause typically excludes deaths due to natural causes, illness, suicide, or certain high-risk activities.

Here are some examples to illustrate how double indemnity works:

• Example 1: Accidental Car Crash

  Imagine Sarah has a life insurance policy with a face value of $500,000, which includes a double indemnity clause. Tragically, Sarah dies in a severe car accident that is determined to be purely accidental. Because her death falls under the accidental circumstances specified in the double indemnity clause, her beneficiaries would receive $1,000,000 (twice the $500,000 face value) instead of the standard amount.

• Example 2: Workplace Fatality

  John, a construction worker, has a life insurance policy for $250,000 with a double indemnity provision. While working on a project, he suffers a fatal fall from a scaffold, an incident deemed an accidental workplace death. Due to the double indemnity clause, his family would receive $500,000, providing enhanced financial support following this unforeseen tragedy.

• Example 3: Death from Illness (Exclusion)

  Consider Maria, who also has a life insurance policy with a $1,000,000 face value and a double indemnity clause. One day, Maria suffers a sudden, unexpected heart attack and passes away. While her death was sudden, it was due to a natural cause (illness). Most double indemnity clauses specifically exclude deaths from illness or natural causes. In this scenario, Maria's beneficiaries would receive the standard $1,000,000 policy payout, but not the additional double indemnity benefit, because the conditions for accidental death were not met.