Double Indemnity Agreement

Double Indemnity Agreement: A Comprehensive Guide

In the world of insurance, there are various types of policies that individuals can purchase to protect themselves and their assets. One such policy is the double indemnity agreement, which is an add-on to a life insurance policy. In this article, we will discuss what double indemnity is, how it works, and its benefits.

What is Double Indemnity?

Double indemnity is an insurance clause that doubles the payout of a life insurance policy if the insured dies under specific circumstances. This clause typically covers death by accidents or unforeseen events, such as car accidents, plane crashes, natural disasters, or homicides. In some cases, the policy may also include death due to specific illnesses, like cancer.

Double indemnity is usually added as an endorsement or rider to an existing life insurance policy. It typically costs extra, and the payout amount may vary depending on the insurer`s terms and conditions.

How Does Double Indemnity Work?

Suppose the insured dies under circumstances covered by the double indemnity clause. In that case, the life insurance company will pay the beneficiary twice the policy`s face value as a lump sum. For example, if the policy`s face value is $100,000, the beneficiary will receive $200,000 under the double indemnity agreement.

However, it`s crucial to note that the policyholder must die solely due to the covered event. If the insured dies due to an illness or natural causes, the policy`s regular death benefit will apply, not the double indemnity clause.

Benefits of Double Indemnity Agreement

The main benefit of a double indemnity agreement is the additional payout that beneficiaries receive. The extra money can help cover unexpected expenses, such as medical bills, funeral costs, or outstanding debts.

Additionally, double indemnity may provide peace of mind to policyholders who participate in high-risk activities, like extreme sports, or have dangerous jobs that increase the likelihood of accidental death.

However, as previously mentioned, double indemnity coverage usually comes at an additional cost. Policyholders must weigh the added expense against the potential benefits to determine if it`s worth their investment.


A double indemnity agreement can offer significant advantages to policyholders and beneficiaries, especially under specific circumstances. It`s always recommended to consult with an insurance agent or financial advisor to determine if this type of coverage is appropriate for your situation. In any case, understanding the terms and conditions of your life insurance policy, including any endorsements or riders, is crucial to ensure that your loved ones are protected in the event of your death.