What Is An Accelerated Death Benefit: Everything You Need to Know

Shawn Plummer

CEO, The Annuity Expert

An accelerated death benefit, also referred to as an ADB, is a life insurance policy that allows the insured person to collect a portion of the death benefit while they are still alive. This can be a valuable option for terminally ill people who want to use the money for medical expenses or other costs associated with their illness. In this guide, we will discuss accelerated death benefits, who is eligible for them, and how to apply.

What Is An Accelerated Death Benefit: Everything You Need to Know

An accelerated death benefit is a life insurance policy that allows the insured person to collect a portion of the death benefit while they are still alive.

This can be a useful option for terminally ill people who want to use the money for medical expenses or other costs associated with their illness. To be eligible for an accelerated death benefit, the insured person must be diagnosed with a terminal illness by a physician. In addition, the terminal illness must be expected to result in death within 24 months.

Once the insured person is approved for an accelerated death benefit, they receive a lump sum payment typically equal to 50-80% of the death benefit amount.

The money can be used for any purpose, including medical expenses, funeral costs, or other final expenses. However, it is essential to note that the accelerated death benefit will reduce the death benefit paid to the beneficiaries upon the insured person’s death.

The Benefits

There are several benefits of accelerated death benefits, including:

  • The insured person can use the money to cover expenses associated with their terminal illness.
  • The beneficiaries will not have to wait for the death benefit payout.
  • The money can be used for any purpose, including medical expenses, funeral costs, or other final expenses.

The Drawbacks

There are some drawbacks to accelerated death benefits to be aware of. First, the money received from an accelerated death benefit is typically taxable. Additionally, the death benefit paid to the beneficiaries will be reduced by the amount of the accelerated death benefit, which could leave them with less money than they were expecting.

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Next Steps

We hope this article has answered all your questions about accelerated death benefits and life insurance policies in general. If you have any further questions or want to speak with an expert, please do not hesitate to contact us. Our team of experts is more than happy to help you find the right policy for your needs. Thank you for reading!

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Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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