Living benefits: Accelerated death benefit riders


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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2 Responses to “Living benefits: Accelerated death benefit riders”

  1. Terry G. Powers Insurance

    I have used this abr on 3 of my clients. It made a world of difference in the remaining stages of their lives. One of my insureds was able to stay at home with his family, another needed a care giver at home so the working spouse could quit her second job, and the third was able to take his family on a short vacation they only dreamed about. Their ages were 38, 40, and 42. Thank you Cincinnati Life Insurance for this benefit.

  2. J. Michael Dempsey

    A close friend of mine contacted me and shared that his doctor told him he had an inoperable brain aneurysm, which would end in death. The doctor gave him “a year or so” to live. My friend had a half-million dollar policy which permitted him to use a $250,000 accelerated death benefit. He used this money to pay off certain debts and more importantly–to him–travel throughout the country to say “Good-by” to numerous friends and relatives. He passed away about 18 months afterwards. Having this benefit–not terribly long after the death of his wife–provided my friend tremendous consolation during the year and a half before his own death. Nothing else needs to be said.

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