Accelerated death benefit


Also found in: Acronyms.

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 ?
The life insurance products in question go by various names - life insurance for the living, living needs policies and accelerated death benefits. Like traditional life insurance, living needs policies pay beneficiaries on the death of the insured.
* Accelerated death benefit rider--terminal illness
In this type of buy-sell arrangement, adding a LTC rider (accelerated death benefit feature based on the LTC triggers) is an inexpensive way to get LTC benefits.
However, a blow to the product was delivered when most companies later adopted the "terminal illness accelerated death benefit" to address the critical illness exposure.
Today, some insurers are offering riders in addition to the accelerated death benefit riders that restore the initial death benefit or extend the LTC benefits to twice the original maximum benefit period.
281 would let an insurer sell a life insurance policy with a provision or rider designed in such a way that the policy would pay accelerated death benefits, or "special benefits," when the insured came to need institutional care and was expected to need institutional care for the rest of his or her life.
With the addition of the LTC rider, which could add up to another 4 years of coverage, the overall amount of LTC protection (accelerated death benefit + LTC rider) is equivalent to up to 6 times the original asset: $100,000 + (4-year rider @ $50K/yr = $200,000) = $300,000 or 6 years of $50,000.
Today, many policies offer accelerated death benefit riders that can provide a terminally ill insured with an advance on the death proceeds prior to death.
Several other benefits are included with the protector Series at no additional cost, including common carrier accidental death benefit, which provides additional payments if death occurs as a result of certain accidents, and an accelerated death benefit, which provides early access to up to half of the death benefit prior to death if the insured individual is diagnosed as terminally ill.
It can be combined with accelerated death benefit options to allow early access to benefits without affecting guarantees.
Accelerated Death Benefit Rider: A rider that lets the policyholder collect a portion of the policy's death benefit if he or she becomes terminally ill with a short life expectancy, such as one year.
Disability insurance, life insurance and life insurance policies with accelerated death benefit provisions can help families cope with these sorts of financial hits and fill in the many gaps left by Social Security disability benefits and employer-sponsored disability plans.

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