How Does an Accelerated Death Benefit Work

There is so much more to life insurance than most people know about. If you are looking for one, you will be surprised by so many options and riders that can be added to some policies, that you can actually benefit from.

All sorts of riders are used to make life insurance policy even more suitable and more individual, depending on the needs of future policyholder.

One of the relatively newest option, rider to many life insurance policies is an accelerated death benefit. It is basically an option that you can use in cases of terminal illness.

What is accelerates death benefit ADB and how it works?

ADB is a modern version of life insurance policies that were used in the past, mainly by terminally ill policyholders that had to raise cash to pay their medical bills especially it is beneficial for elderly parents. ADB is a part of life insurance policy, that allows you to borrow some money up front (before something happens to you). If you, by any chance become terminally ill, you can use this money to pay your medical bills, or you can use this money for whatever might make your life more enjoyable in that situation.

Policies that offer ADB can be used as protection against chronic or critical illness. Which means that besides the traditional death benefit that you agreed on, and cash value that has been building up with time (in case you have whole life insurance policy), now you can even stop a stream of income from your policy when you need the money.

Who needs ADB?

In some cases, this benefit already comes with policy, and sometimes it can be added to it. We could all agree that it is a good back up plan for every person, as we can’t really know what will happen to us while we are alive. However, if your family medical history isn’t that promising, you should definitely consider adding this option to your existing policy. At first only whole life insurance policy holders were able to use this option. Nowadays, many insurance companies offer it as a rider to term life insurance policy as well.

However, keep in mind that you can add it to your policy before you actually become terminally ill. If you are already sick and you want to add this benefit, you should consult with an experienced agent, but don’t get your hopes up just yet.

Even though we mentioned some options that this money could be used for, there is really no restriction on how you are actually going to use it. ADB is a benefit that you can use however you like, in the case of being diagnosed with a terminal illness. Many people who choose this option use this money for treatments and other costs needed to stay alive.

If the policy holder is not able to take care ofhimself, this money is usually used for nursing home or any other care that you find suitable. Benefits are paid out in a single lump sum or by monthly instalments, depending of the insurance company you have chosen. Last of all, I would like to say if you are not ill but do any risky job like vehicle driving, you should have a policy right now.