Double indemnity is a clause or provision in an insurance policy in which the company pays the beneficiary approximately double the amount of the standard contract in certain cases of accidental death. Double indemnity does not cover murder or suicide, or deaths by natural causes. In instances where the cause of death is unclear or suspicious, the insurance company typically does not pay the money until enough evidence is gathered to indicate that the death was indeed an accident. Beneficiaries who feel they are due this money may sue the insurance company for breach of contract.
This insurance coverage is also alternatively known as an "accidental death benefit." Despite its popular name of "double indemnity," however, companies do not necessarily offer exactly twice the amount of the face value of the policy in cases of accidental death. It may be a different multiple of this value; the specific terms are particular to each agency.
Double indemnity coverage is typically offered as a supplement that one can add to the life insurance that he or she purchases. It usually requires a more expensive premium. Coverage of children and people with dangerous jobs is also more expensive. Some policies expire when the person covered by it reaches a certain age, such as 65 or 70, when accidents are considered more likely to occur. It is because of these provisions, and because the actual number of accidental deaths each year is quite low, that companies are able to finance double indemnity.
Not all accidental deaths are covered by double indemnity; most polices specifically exclude its coverage from instances when the covered person is deemed to be partially responsible for it, by, for example, taking drugs or behaving recklessly. As well, death resulting from war or illegal activities are usually excluded. There are also limits on how much time may go by between the accident and the death. For example, the insured person may need to die within 90 days of the accident for the double indemnity benefit to go into effect.
This type of insurance coverage is commonly associated with the 1944 American noir film directed by Billy Wilder called Double Indemnity, and based on a Raymond Chandler novella of the same name. The crime story is based on a New York woman who conspires with her lover to kill her husband after he takes out a life insurance policy that has a substantial double indemnity pay-out.
