What type of insurance pays off if the insured is killed from accidental bodily injury or faces specified losses from an accident?

The correct answer is Accidental Death and Dismemberment Policy (AD&D). This type of insurance is specifically designed to provide financial protection in the event of an accidental death or a specific loss resulting from an accident, such as the loss of a limb or the loss of eyesight.

AD&D policies typically pay a benefit if the insured suffers a fatal injury due to an accident. Additionally, these policies often provide a set amount for specific injuries, which can include the loss of limbs, eyesight, or other significant accidents. This type of coverage is particularly valuable as it focuses solely on injuries that occur as a result of accidents, distinguishing it from other types of insurance that may cover a wider range of health issues or disabilities.

In contrast, other options like Individual Disability Income Policy are structured to replace lost income if the insured becomes unable to work due to illness or injury—not specifically focused on accidents. Major Medical Insurance provides comprehensive healthcare coverage, including hospital stays and doctor visits, but does not specifically address payments for accidental injuries. Lastly, Business Overhead Expense Policy is tailored for business owners to cover overhead expenses when they become disabled, rather than offering benefits for accidental deaths or injuries.