Health · Chapter 16 · Riders
AD&D: Principal & Capital Sums
Definition
Accidental Death & Dismemberment pays for catastrophic accidents: death → the PRINCIPAL sum (the face amount) · dismemberment → the CAPITAL sum (typically 50% of principal). Death generally must occur within 90 days of the accident. Premiums after-tax; benefits tax-free.
Exam tip
Principal = death (P = the big one). Capital = limbs. Also called multiple indemnity coverage.
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
Related terms