Accelerated Death Benefit (ADB) is a benefit provided by some life insurance policies, allowing policyholders with a terminal illness to receive a portion of their death benefit to cover medical or end-of-life expenses. This reduces the death benefit paid to beneficiaries, but can provide financial support in difficult times. ADB is a rider added to a policy, and payment amount is a percentage of the death benefit.
Accelerated death benefit (ADB) refers to a type of benefit provided by some life insurance policies that allows a policyholder who has been diagnosed with a terminal illness or a severe medical condition to receive a portion of the death benefit before their death. The ADB is intended to help policyholders cover their medical expenses, long-term care costs, or other end-of-life expenses.
To qualify for an ADB, the policyholder must typically meet certain criteria, such as having a life expectancy of less than 12 to 24 months or being diagnosed with a specific medical condition specified in the policy. The amount of the accelerated benefit that can be paid out is usually a percentage of the death benefit, such as 50% or 75%.
The ADB is not a separate insurance policy but rather a rider that can be added to a life insurance policy. The policyholder must usually pay an additional premium for the rider, and the amount of the premium can vary depending on factors such as the policyholder’s age, health, and the amount of the death benefit.
It is important to note that an ADB reduces the amount of the death benefit that will be paid to the policyholder’s beneficiaries upon their death. However, the ADB can provide policyholders with much-needed financial support during a difficult time, and it can help alleviate some of the financial burden on their loved ones.