What is an accelerated death benefit?

An accelerated death benefit is a provision in some life insurance policies that allows the insured to access a portion of the death benefit while still alive, typically under specific circumstances such as being diagnosed with a terminal illness. This benefit can provide financial assistance when it is most needed, allowing the insured to cover medical expenses, pay off debts, or fund other necessary expenses during a critical time.

When terminally ill, the policyholder may find themselves facing significant costs related to medical care or end-of-life planning, making access to these funds beneficial. The total amount received through the accelerated benefit is then deducted from the total death benefit, which will be paid to the beneficiaries upon the insured’s passing.

This option is particularly valuable as it offers flexibility and support during a challenging period, allowing the insured to use their policy for help while they are still alive rather than waiting until death occurs.