Can I Qualify for an Accelerated Death Benefit Rider?

iQuanti: Accelerated death benefit riders are life insurance add-ons that can allow you to access your death benefit while you're still alive. These riders are designed to provide you and your loved ones with financial assistance if you're diagnosed with a terminal illness.

Accelerated death benefit riders are available as a supplement to many types of life insurance policies. But keep in mind that you must meet a few eligibility requirements to qualify for the payout. Let's dive deeper into who can qualify for accelerated death benefit riders and what types of plans offer this feature to help you find a life insurance quote that is suited to your needs.

Who can qualify for an accelerated death benefit rider?

Many policyholders that get a life insurance policy are eligible for an accelerated death benefit rider. If it's not included in your policy, you can typically add it for an additional cost. 

In general, you can qualify for the early death benefit payout if you contract a terminal illness and have a shortened life expectancy or become incapacitated for an extended period. 

What policies offer accelerated death benefit riders?

Many types of policies offer accelerated death benefit riders, including:

Term life insurance

Term life insurance policies offer coverage for a specific time period, usually 10 to 30 years. Premium payments tend to be less expensive than permanent life insurance premiums, making these plans an affordable option for policyholders. But keep in mind that once the policy's term ends, you'll need to get a new policy to continue coverage.

Whole life insurance

Whole life insurance is a type of permanent policy, meaning it offers guaranteed lifetime coverage. Part of each premium's payment goes into a cash value growth component, which grows tax-deferred at a fixed interest rate. Once you build up enough cash value, you can withdraw from it, borrow from it, or surrender your policy to get the full amount minus surrender charges.

Variable life insurance

Variable life insurance is a type of permanent life insurance policy that has adjustable premiums and death benefits. Additionally, you can invest your cash value into stocks, bonds, mutual funds, and other assets. This can help you potentially grow your cash value faster, but you can also risk losses.

Types of accelerated death benefit riders

There are several kinds of accelerated death benefit riders, each designed for slightly different purposes. Here's how each type works: 

Critical illness riders

Critical illness riders pay out a significant portion of your death benefit, generally as a lump sum, if you receive a diagnosis for a major health condition like a heart attack, stroke, or cancer. 

Chronic illness riders

Chronic illness riders are paid out if you have become disabled and incapacitated for a long period of time in a way that prevents you from performing basic activities, such as eating and getting dressed. Payments for these riders can be made annually or in one lump sum.

Terminal illness riders

Terminal illness riders allow policyholders to access their death benefit early if they're diagnosed with a terminal illness like cancer or end stage renal failure. This payout can allow you to cover expenses before your passing.

Long-term care riders

Long-term care riders offer additional coverage for the costs of long-term or nursing home care. With these types of riders, payouts can be monthly. Keep in mind that long-term care riders will cost more and require separate underwriting.

The bottom line

Life insurance doesn't just provide for your family after you pass away. Thanks to the accelerated death benefit rider, your policy can offer you and your family financial assistance if you are diagnosed with a major illness.

With that in mind, it's smart to shop around when looking for life insurance quotes. Make sure the policy you move forward with comes with one of these riders so you have the option to provide your loved ones with extra financial security.

Source: iQuanti, Inc.


Categories: Insurance

Tags: accidental dental benefit, insurance, life insurance