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Author: Brett Helling

Last updated: December 26, 2024

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Definition of:

Accelerated Death Benefit Rider

An Accelerated Death Benefit Rider is a special provision that allows policyholders to access a portion of their policy’s death benefits while they are still alive in the event that they are diagnosed with a terminal illness. This common policy addition is usually available at no additional cost. Accelerated death benefits will reduce the amount of money paid out to beneficiaries as if it is an advance on the future death benefit.

There may be a limit on the amount of accelerated death payouts that policyholders may receive while still alive. Typically, accelerated death benefits are not subject to income tax, although in some cases the payouts may be subject to fees and interest. In order to qualify for early payouts, the policyholder must provide medical certification that they are suffering from a qualifying condition. Accelerated Death Benefit Riders may have different names depending on the provider, or you may be able to choose between different types of Accelerated Death Benefit Riders specifically related to terminal, critical, or chronic illnesses. Let’s explore two common variants on the Accelerated Death Benefit Rider, the Critical Illness Rider and the Chronic Illness Rider.