What is Accelerated Death Benefit

An accelerated death benefit is a rider you can buy along with your life insurance policy. It allows you to take some of your death benefits while you are still alive. However, this money is removed from the death benefit given to your beneficiary after you die.

Pros of accelerated death benefit

  • You can benefit from your life insurance if you are terminally ill.
  • If you are a senior who is dying, your accelerated death benefit can help pay for your needs. These needs include a nursing home, hospital fees, treatments, etc.
  • Your family will receive a death benefit after you die.
  • You do not need to pay back the death benefit because it is not a loan.
  • The accelerated death benefit you collect can be used anyhow you want. Therefore, you can use it to pay debts or even take a vacation.

Cons of accelerated death benefit

  • Your beneficiary receives a smaller death benefit.
  • You can get accelerated death benefits only if you are very ill. Some insurance companies ask that you are dying to get this benefit.
  • Insurance companies may need a medical report from your doctor.
  • If you take your death benefit early, you may have to pay tax.
  • Some insurance companies charge a higher fee for accelerated death benefits.

Some insurances companies offer accelerated death benefits with their life insurance policies, but they may not mention it. If you want to get this benefit, contact the company and ask about it. The accelerated death benefit may also come with an insurance policy at no extra cost. In other cases, you may need to buy this benefit.