What type of insurance pays a lump sum benefit if an insured loses sight in both eyes?

Accidental Death and Dismemberment (AD&D) insurance is specifically designed to pay a scheduled, lump-sum benefit for death or specific severe injuries resulting from an accident. The benefit for a dismemberment, such as the loss of sight in both eyes, is known as the "capital sum." This payment is a predetermined amount stated in the policy and is paid directly to the insured. In contrast, medical, hospital, or major medical expense policies reimburse the insured for the actual costs of medical care and treatment, rather than paying a fixed lump sum for the injury itself.

A. Hospital expense: This policy reimburses for costs associated with a hospital stay, not a lump sum for the specific injury of blindness.

C. Major medical: This is a comprehensive policy that covers a wide range of medical costs but does not provide a lump-sum benefit for a specific dismemberment.

D. Medical expense: This is a general category of insurance that reimburses for healthcare costs, not a specific lump-sum payment for loss of sight.

1. Code of Virginia, Title 38.2. Insurance. Chapter 35, Accident and Sickness Insurance Policies. While not mandating the specific benefit, the framework for AD&D policies is established here, distinguishing them from medical expense policies. The nature of AD&D as a policy paying for specific losses (loss of life, limb, or sight) is a foundational concept within this regulatory structure.

2. Rejda, G. E., & McNamara, M. J. (2017). Principles of Risk Management and Insurance (13th ed.). Pearson. In Chapter 14, "Health Insurance Coverages," the section on Accidental Death and Dismemberment (AD&D) Insurance explicitly states, "The principal sum is paid for accidental death... A percentage of the principal sum, called the capital sum, is paid for the accidental loss of a hand, foot, or the sight of one eye... The full capital sum is paid for more severe injuries, such as the loss of both feet, both hands, or the sight of both eyes" (p. 327).

3. Virginia State Corporation Commission, Bureau of Insurance. (2022). A Consumer's Guide to Accident and Sickness Insurance. This guide explains different types of health insurance available in Virginia, clarifying that AD&D policies "pay a set dollar amount for a covered accident" for specific injuries, which is distinct from medical expense policies that cover treatment costs (p. 5-6).