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Double Indemnity

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A term of an insurance policy by which the insurance company promises to pay the insured or the beneficiary twice the amount of coverage if loss occurs due to a particular cause or set of circumstances.

Double indemnity clauses are found most often in life insurance policies. In the case of the accidental death of the insured, the insurance company will pay the beneficiary of the policy twice its face value. Such a provision is usually financed through the payment of higher premiums than those paid for a policy that entitles a beneficiary to recover only the face amount of the policy, regardless of how the insured died.

In cases where the cause of death is unclear, the insurance company need not pay the proceeds until the accidental nature of death is sufficiently established by a PREPONDERANCE OF EVIDENCE. A beneficiary of such a policy may sue an insurance company for breach of contract to enforce his or her right to the proceeds, whenever necessary.

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