Minnesota Life Insurance License Practice Exam

Accidental and dismemberment insurance will pay the principal sum if death occurs:

1. As a result of an accident only

2. Regardless of the cause of the accident

3. Only if the accident was reported

4. As a result of natural causes

The correct answer is: Regardless of the cause of the accident

The principal sum in accidental and dismemberment insurance is intended to provide benefits in the event of death or dismemberment due to an accident. The key aspect of this type of insurance is that it covers instances of accidental death, which includes a specified range of incidents that could lead to death, so long as those incidents are deemed accidental. Choosing the option indicating that it pays regardless of the cause of the accident highlights that the policy pays the full principal sum for accidental death without regard to other factors. This means that if a person dies directly due to an accident, the insurer is obligated to pay the stipulated amount. The other choices reflect misunderstandings about the conditions under which benefits are paid. For instance, stating that benefits are paid only if the accident was reported would unjustly limit coverage, as the insurance typically does not require proof of reporting for claims. Additionally, mentioning death from natural causes is not relevant in this context since this insurance specifically addresses accidental incidents, not those arising from health or other natural factors. Thus, the option chosen correctly captures the essence of what accidental and dismemberment insurance covers.