Accelerated death benefit.

In plain English

An accelerated death benefit is a feature on many life insurance policies that pays out a portion of the death benefit to you, the living policyholder, when you have a qualifying illness such as a terminal diagnosis or, on some policies, a chronic or critical condition. You use the money while you are alive, often for medical bills, care, or final expenses. Whatever you take early is subtracted from what your beneficiaries receive later. Some insurers include this rider for free; others charge a fee or reduce the payout when you use it.

01Why it matters

A serious diagnosis often comes with huge costs and lost income, and this feature can give you cash when you need it most instead of forcing your family to wait until after you die.

02The math, step by step

Say you have a $300,000 policy with an accelerated death benefit and you get a terminal diagnosis. You file a claim and the insurer approves an early payment of up to a set percentage of the policy. If you take $150,000 early to cover care, your beneficiaries would later receive the remaining $150,000 (minus any fees or interest the insurer applies). The exact percentage allowed and any discount the insurer applies are set by your specific policy, so check the maximum accelerated percentage and any discount in your own policy documents.

03What this is NOT

04Receipts

Every figure on this page is sourced to a primary document. Tap to open the original.