Multiple Indemnity
What Does Multiple Indemnity Mean?
Multiple indemnity refers to a clause in an insurance policy that provides enhanced payouts under specific circumstances. In life insurance policies, this clause typically pays a higher amount if the death is caused by accidental means. However, it usually excludes certain situations, such as suicide, death from natural causes, death resulting from the insured’s gross negligence, death during hazardous activities like skydiving, or murder committed by the policy’s beneficiary.
Historically, multiple indemnity was sometimes referred to as double indemnity or triple indemnity. However, in practice today, most such clauses provide only double the face amount of the policy or slightly less. They are also often referred to as accidental death benefit riders.
Insuranceopedia Explains Multiple Indemnity
Multiple indemnity clauses are most commonly found in life insurance policies, though they may occasionally be included in other types of policies, such as those covering property damage caused by arson. In life insurance, since only about 5% of deaths result from accidents, adding a multiple indemnity clause can be relatively inexpensive. However, individuals working in high-risk industries, such as mining or construction, are often ineligible for this coverage due to the increased likelihood of accidental death.
