Accidental Death & Dismemberment
Accidental Death and Dismemberment
MR. WATSON: Look. It's real easy. This policy is going to pay you for what?
ALL: For an accidental death & loss of certain body parts. Not fingers or toes!!!
MR. WATSON: Yep! There are two parts:
- Principal Sum - pays for accidental death, death can't result directly or indirectly due to a physical ailment.
- Capital Sum - pays for severance (sometimes loss of use) of
- hands,
- arms,
- feet,
- legs, or
- eyes
Benefits
Principal sum
MR. WATSON: The amount paid for a death benefit is called what? The principal sum. You choose a death benefit, $100,000. Make sense?
MR. WATSON:. You can't die directly or indirectly due to a physical ailment. If I have a heart attack, end up in a car crash, will it pay? No. Sometimes when someone dies in an accident, the policy will pay double or even triple the principle sum, so like $200,000 or $300,000 here. Make sense? They call that double indemnity or triple indemnity.
MR. WATSON: The policy-owner must name a beneficiary. The beneficiary may be revocable (can be changed at anytime) or irrevocable (can not change it without the beneficiary's consent). Know this!
MR. WATSON: Only the policy owner signs the application. The beneficiary DOES NOT need to sign.
Capital sum
MR. WATSON: Let's say I lose a hand. It will pay 25% of the principal sum. If I lose like a leg, I get a little more. Lose an eye and a leg, you hit the jackpot. The more things you lose, the better off you are. You get 100 percent if you lose like a leg, an eye, and a foot. The way the policy is written, if you lose 2 or more pieces, it pays 100% of the principal sum.
MR. WATSON: Be careful! Not 100% of the capital sum, because the capital sum is stated as a percentage of the principal sum. You can’t pay 100% of a percentage, that wouldn’t make sense. If you lose 2 or more body parts from the same event, it pays 100% of the principal sum
MR. WATSON: That's called the capital sum. And it is expressed as a percentage of the principal sum.
MR. WATSON: Does that make sense? Would it pay if I lost my finger or a toe?
ALL: Yes.
MR. WATSON: Nope. Hands, Feet, Legs, Arms, & Eyes.
MR. WATSON: You have to lose your hand above the wrist. Wow!