Accelerated death benefit

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Accelerated Death Benefit

A death benefit in some life insurance policies that may be paid before the policyholder's actual death. Generally speaking, one may use the accelerated death benefit only to defray medical expenses should the policyholder be diagnosed with a terminal illness. The idea of the accelerated death benefit originated in the 1980s to help pay for some of the medical expenses of AIDS patients.

Accelerated death benefit.

If your life insurance policy has an accelerated death benefit (ADB), you may qualify to use a portion of the death benefit to pay for certain healthcare expenses, such as the costs of a terminal illness or long-term care, while you're still alive.

Using the ADB, you take cash advances from the policy, reducing the death benefit by up to a fixed percentage. The balance is paid to your beneficiaries on your death.

While an accelerated death benefit can help ease current financial burdens, including this option in your policy increases the cost of coverage. And, if you do take money out, it reduces what your beneficiaries receive.

References in periodicals archive ?
To address this concern, several no-lapse guarantee life insurance products also offer additional flexibility through access to cash value in early years, return of premium or accelerated death benefits.
Phoenix Safe Harbor Term Life covers riders, which can provide accelerated death benefits in the case of chronic illness, critical illness or terminal illness, and a waiver of premium in the case of unemployment.
Are you having conversations about adding long-term care riders or accelerated death benefits to life policies?
A popular feature of life insurance today is accelerated death benefits or living benefits.
However, if the insured borrows or withdraws the cash value or uses any of the accelerated death benefits (that most plans offer) those amounts will be deducted from the final death benefit.
2968 would eliminate the required reduction in the amount of accelerated death benefits payable to certain terminally-ill people insured under Servicemembers' Group Life Insurance or Veterans' Group Life Insurance.
Like the introduction of accelerated death benefits in the 1980's, this develop seems to offer an important and attractive option to certain policyholders who would want or need to access part of their death benefit," ACLI said.
One alternative to the purchase of a long-term care insurance policy is the accelerated death benefits that may be available from a life insurance policy.
21) The general rule is that accelerated death benefits provide a higher payout than viatical settlements but typically impose a great number of restrictions on medical conditions.
Biders such as accelerated death benefits allow terminally or chronically ill policyholders to get cash value out faster.
The IRS considers these tax-exempt accelerated death benefits.
The availability of accelerated death benefits for terminally ill individuals, such as AIDS/HIV patients, provided a source of needed revenue because many terminally ill policy owners did not have medical insurance or were under insured.

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