What are accelerated benefits?
A life insurance policy ordinarily pays benefits to a beneficiary after a policy owner dies. But policy benefits can be accelerated if they are paid directly to a chronically or terminally ill policy owner before he or she dies. Provisions for accelerated or “living benefits” may be included in a policy when purchased or attached as a rider. These also are sometimes referred to as “accelerated death benefits” or “accelerated benefits riders.”
When can I request early payments?
Certain medical circumstances can trigger eligibility for early payment of all or a portion of your policy’s proceeds, including:
• Terminal illness, with death expected within 24 months.
• Acute illness, such as acute heart disease or AIDS, which would result in a drastically reduced life span without extensive treatment.
• Catastrophic illness requiring extraordinary treatment, such as an organ transplant.
• Long-term care needed because you cannot perform a number of daily living activities, such as bathing, dressing, or eating.
• Permanent confinement in a nursing home.
Can my beneficiaries collect any death benefit if I receive an accelerated benefit payment?
The amount paid to your beneficiary is reduced by the amount you received as an accelerated benefit. If your policy’s proceeds are entirely depleted, no benefit is paid after your death.