California Life and Health Insurance Practice Exam 2025 – Complete Test Prep

Accidental death and dismemberment (AD&D) insurance is specifically designed to provide financial benefits in two primary situations: in the event of an accidental death and when an insured person suffers severe injuries that lead to dismemberment, such as the loss of limbs or other bodily functions.

This type of insurance serves a targeted purpose, as the benefits are payable if the cause of death or injury directly results from an accident. This differentiation is crucial because it highlights that the coverage does not extend to deaths or injuries arising from natural causes or other non-accidental incidents. The intention behind AD&D insurance is to offer protection against unexpected risks associated particularly with accidents, making the correct answer accurately reflect the scope of coverage provided.

The other options present broader or different contexts that do not align with the specific coverage of AD&D insurance. For instance, while travel insurance may cover accidents during travel, it does not inherently relate to the dual purpose of AD&D insurance. Similarly, while coverage for extreme activities might be beneficial, AD&D insurance focuses on accidental events without specifically targeting high-risk activities. The specificity of accidental death and dismemberment in the correct answer directly addresses the fundamental nature of this policy type.