Tennessee Insurance Practice Exam

Which provision of a life insurance policy will pay a stated benefit amount if a person is blinded in an industrial accident?

1. Waiver of Premium provision

2. Accidental death and dismemberment clause

3. Total and Permanent Disability provision

4. Life Benefits Adjustment clause

The correct answer is: Accidental death and dismemberment clause

The Accidental Death and Dismemberment clause is a specific provision that provides financial benefits in the event of certain accidental injuries, including those that result in the loss of limbs or impairment of senses, such as blindness. This clause typically pays out a stated benefit amount when an insured individual suffers an injury, like blindness, due to an accident. In the context of life insurance policies, this provision serves to protect policyholders from the severe financial impact that can result from such life-altering events. It recognizes the loss of function or quality of life as significant as death, thereby providing the insured or their beneficiaries with a monetary benefit to aid in their financial situation post-accident. The other provisions mentioned serve different purposes. The Waiver of Premium provision allows policyholders to stop making premium payments when they become disabled, but it does not pay out a lump sum for specific injuries. The Total and Permanent Disability provision offers benefits to individuals who are permanently unable to work due to disability, which may or may not include blindness specifically, but is more about the broader inability to perform any gainful work. The Life Benefits Adjustment clause typically deals with payment adjustments after certain events but is not specifically designed for dismemberment or loss of eyesight due to an accident.