AD Banker Comprehensive Practice Exam

What is the maximum amount of any accidental death benefit included under a credit health policy?

1. $50,000

2. None of the answers listed

3. The amount of outstanding indebtedness at any given time

4. Double the amount of the original indebtedness

The correct answer is: The amount of outstanding indebtedness at any given time

The maximum amount of any accidental death benefit included under a credit health policy is determined by the outstanding indebtedness at any given time. This means that the policy is structured to provide coverage that directly correlates with the amount of debt that an individual has, ensuring that the benefit can adequately settle outstanding loans or credit if the insured suffers an accidental death. This feature is designed to protect both the lender and the borrower by aligning the benefit amount with the current financial obligation, rather than a fixed or arbitrary sum. In the context of this question, other choices do not accurately reflect the nature of the benefits provided under credit health policies. For example, a fixed amount such as $50,000 does not adapt to individual circumstances, and stating ‘none of the answers listed’ would disregard the existing underwriting criteria that govern these policies. Lastly, while the original indebtedness might seem relevant, the benefit must adjust based on fluctuations in the outstanding balance during the period of coverage. Hence, the correct response emphasizes this dynamic relationship between the accidental death benefit and current debt levels.