Living benefits: Accelerated death benefit riders

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Accelerated death benefit riders can provide funds to cover medical costs or other expenses while the insured is still living.

When choosing a life insurance policy, the death benefit paid to a beneficiary is the primary focus. However, did you know that some life insurance plans provide additional living benefits? Policies not only provide financial security after death, but in some cases they may provide benefits in the event of a terminal or permanently incapacitating illness.

An accelerated death benefit rider is an enhancement to a life insurance policy that allows a policy owner to access some portion of the death benefit while the insured is still living. These proceeds can be used in any way that the policy owner chooses: to cover medical costs, to pay expenses needed for nursing home care or even to fulfill a lifelong dream.

With an accelerated death benefit rider, several events in your life could give you early access to some portion of the death benefit of your life insurance policy:

  • Diagnosis of a terminal illness, with death expected to occur within a certain period
  • Incapacitation resulting in the inability to perform a specified number of activities of daily living, such as eating, bathing or dressing
  • Permanent confinement to a nursing home

After purchasing a life insurance policy with this kind of rider or enhancement, these triggers could grant you access to some portion (often a percentage) of your total death benefit. Check with your attorney or financial adviser to understand all implications that receiving a living benefit could have on taxes or on the final amount paid by an insurance company at your death.

An accelerated death benefit rider is often offered as an option when you purchase a new life insurance policy, sometimes at an additional premium but in some cases at no additional cost. In certain situations, you may also add these benefits to an existing policy.

The best way to know what options exist for you is to review your current life insurance policy with your independent life insurance agent. Ask your agent if you have the option to obtain living benefits and what conditions must be met to access them.


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