What is the term for a life insurance policy that pays a multiple of the coverage amount in the event of certain accidents?

The term for a life insurance policy that pays a multiple of the coverage amount in the event of certain accidents is known as multiple indemnity. This provision allows the insurer to pay out an increased benefit if the insured dies as a result of an accident, which typically is an amount that is greater than the standard face value of the policy. For instance, if a policyholder has a $100,000 policy with a multiple indemnity clause of double indemnity, the insurer would pay $200,000 if the death were due to an accident covered by the policy.

This feature serves as an incentive for policyholders, emphasizing the importance the insurance industry places on coverage for accidental deaths, which can be sudden and unforeseen. It differentiates the policy from standard life insurance, where the benefit is only equivalent to the face amount regardless of the circumstances surrounding the death.

The other options represent different concepts within the realm of insurance. Accidental death benefit typically refers to additional payments made under specific circumstances, while supplemental coverage generally refers to any additional coverage that enhances a primary insurance policy. Accident waiver suggests a provision that might eliminate responsibilities under certain conditions, but it does not provide the same increased payout structure as multiple indemnity.