Tennessee Insurance Practice Exam

The term "capital sum" in an Accidental Death and Dismemberment (AD&D) policy refers specifically to the payment made for certain defined losses resulting from an accident. This includes compensation for the loss of a limb, eyesight, or other specific body parts, as outlined in the policy. The capital sum is predetermined and is stated in the policy document, highlighting the insurance company's commitment to provide a financial benefit for these types of losses.

In the context of an AD&D policy, it is important to note that while funeral expenses may be covered under other types of insurance, they do not constitute the capital sum associated with dismemberment. Similarly, a whole life coverage amount pertains to a completely different type of life insurance policy and is unrelated to the specific events covered by an AD&D policy. Additionally, payouts based on accidental death only typically address the death benefit and do not encompass the dismemberment component, which is clearly defined by the capital sum as stated.