Accelerated Death Benefit (Living Benefits): Accessing Whole Life Funds While You’re Alive
One of the most modern and popular riders, the **Accelerated Death Benefit (ADB) Rider**—often marketed as “Living Benefits”—allows a policyholder to access a portion of their Permanent Life insurance death benefit while they are still living. This provision is designed to alleviate financial strain during a qualifying health crisis.
When Can You Accelerate Your Death Benefit?
The ADB rider is typically triggered by one of the following health events:
- Terminal Illness: Diagnosis with an illness expected to result in death within a specified time frame (e.g., 12 or 24 months).
- Chronic Illness: Inability to perform a certain number of Activities of Daily Living (ADLs), often requiring long-term care.
- Critical Illness: Diagnosis of a severe condition like a heart attack, stroke, or major cancer.
Financial Impact on Your Whole Life Policy
When you utilize the ADB rider, the insurance company provides a lump-sum payment (e.g., 50% or 75% of the death benefit). It is crucial to understand that:
- The death benefit paid to beneficiaries will be **reduced** by the accelerated amount.
- Depending on the policy, a small administrative fee or interest charge may be applied.
This rider provides an essential bridge, allowing you to pay for expensive medical care, hospice, or maintain quality of life without depleting your other savings.
Disclaimer: This content is for informational purposes only and is not financial or legal advice. Consult a qualified professional before making any financial decisions.