Which term describes a policy that pays benefits only if death occurs due to an accident?

The term that describes a policy that pays benefits only if death occurs due to an accident is the Accidental Death Benefit Rider. This type of rider is an additional provision that can be added to a life insurance policy. It specifically provides a payout to the beneficiary if the insured dies as a direct result of an accident. This means that if the insured dies from natural causes or other non-accidental reasons, the rider would not provide any additional benefit beyond what the base policy covers.

Understanding the nature of this rider is essential, as it highlights how certain products in insurance are tailored for specific events, such as accidental deaths. The rider generally has specific definitions of what constitutes an accident, and it may include certain exclusions as well.

In contrast, the other policy types mentioned, like Universal Life, Term Life, and Endowment Policies, do not exclusively pay benefits only in cases of accidental death. They may pay out under various circumstances, often related to natural causes or other specific conditions outlined in their contracts. Thus, recognizing the unique function of the Accidental Death Benefit Rider within the broader insurance landscape helps to clarify its purpose and significance.