Nobody likes to think of death, and when you put the word “accelerated” in front of it, you’ve got a phrase that sounds very intimidating. However, as we tell people at our Yuba City life insurance agency, an accelerated death benefit rider is a good thing that can be very helpful in some situations. It’s important that you know what this benefit is and how it is used.

Accelerated Death Benefit Rider: Help When you Need it Most

A “rider” is an add-on to an insurance policy. Generally it is a free additional benefit, and often people are not aware that their policy is providing it. In the case of an accelerated death benefit rider, many (if not most) life insurance policies have this feature that allows the policyholder to get a portion of the death benefit while they are still alive if they are diagnosed with a terminal illness that will shorten their life expectancy.

When a partial claim is made, the policy remains in force with a reduced death benefit and a lower premium. While not as common, there are some providers that will allow a policy owner to collect the entire death benefit in this type of situation.

Accelerated Death Benefit Requirements

In order to receive what is also known as a “living benefit” (a much better term in our view), there are certain requirements that must be met. These vary by carrier and by state, so you must be sure to get accurate details for your particular scenario. However, in general the requirements are that:

  • The insured must be diagnosed with a terminal illness.
  • The policy must have been in force for two years at the time of diagnosis.
  • The insured must have a life expectancy of two years or less, and there may be differing benefits for life expectancies of 12 and six months as well.

If you are diagnosed with a terminal illness and you have Yuba City insurance, it’s critical that you check with your agent to see if you have a living benefit available to help you and your family in this very difficult time.

Understanding Life Insurance as an Asset

While there are, of course, restrictions on how your life insurance can be used, you should think of it as an asset in the same you do your bank balance, retirement accounts, etc. The more you know about what’s available to you, the better off you and your family will be. If you’ve got questions about an existing policy or acquiring a new policy, we’re happy to help. Call our Yuba City insurance agency at 530-751-1212.

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