Accelerated Death Benefit
A rider added to a life insurance policy enabling the policyholder to access a portion of the death benefit while alive, provided specific conditions are met, such as having a terminal illness.
Detailed Explanation
This benefit can help cover medical expenses or other costs associated with a severe illness. The amount received is typically deducted from the death benefit paid to the beneficiary upon the insured's death.
Practical Example
Imagine Sarah has a life insurance policy with an accelerated death benefit rider. If she is diagnosed with a terminal illness and has significant medical bills, she can access a portion of her policy's death benefit now to help cover these costs, rather than waiting for the policy to pay out after her passing.
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