Multiple Indemnity

What Does Multiple Indemnity Mean?

Multiple indemnity refers to a clause in an insurance policy that provides for enhanced payouts under certain circumstances. In life insurance policies, such a clause would typically pay a higher amount if the death was caused by accidental means. Usually excluded from “accidental means” would be suicide, death by natural causes, death caused by gross negligence of the insured, death suffered in a hazardous activity such as skydiving, or murder perpetrated by a beneficiary of the policy.

Multiple indemnity has in the past been, and sometimes still is, referred to as double indemnity or triple indemnity, though in practice today most such clauses pay only double or even slightly less than double the payout otherwise contracted for (the face amount). They are sometimes also referred to as accidental death benefit riders.

Insuranceopedia Explains Multiple Indemnity

Multiple indemnity clauses are most often found in life insurance policies, though they are occasionally written into other types of policies, such as property damage caused by arson. In the case of life insurance, as only some 5% of deaths result from accidents, multiple indemnity can be cheap to add to a policy, though people who work in high-risk industries, such as mining or construction, are often ineligible.