Final answer:
An AD&D policy rider's principal sum is the maximum amount that an insurance company will pay out in case of accidental death or dismemberment.
Step-by-step explanation:
An accidental death and dismemberment (AD&D) policy rider's principal sum is equal to the amount of coverage provided by the rider in case of an accident that results in death or dismemberment. It is the maximum amount that the insurance company will pay out in such a situation.
For example, if an AD&D policy rider has a principal sum of $100,000, then the policyholder or their beneficiaries will receive up to $100,000 in the event of accidental death or dismemberment.