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What Is Living Benefit / Accelerated Death Benefit in Life Insurance?
<lingo>Most of the time, life insurance policies provide a payment at the time of the policyholder’s death. In some types of policies, the insurance plan may include a living benefit or accelerated death benefit. Sometimes just called ADB, this coverage may allow the covered individual to receive some of the proceeds from the death benefit during his or her lifetime. This is generally only done when the individual has a terminal illness, and their life expectancy is very little at this point. The funds may be necessary to keep the individual alive.</lingo>
Living Benefit / Accelerated Death Benefit Cleary and Briefly Explained
The living benefit on a life insurance policy is not always present. When it is, it can help the policyholder to receive at least some of the money from the death benefit during his or her lifetime. These are a type of cash advance, and they typically are only available in cases where the individual has been diagnosed with a terminal condition, and they are not expected to live long term.
Most of the time, this type of death benefit access is only available to those who have a year or less to live. They need or want to use the funds from the death benefit to pay for treatments, medical costs, or other needs, usually with a goal of trying to stay alive longer. This may help the individual to remain more comfortable during that time.
<twitter>Most of the time, life insurance policies provide a payment at the time of the policyholder’s death. In some types of policies, the insurance plan may include a living benefit or accelerated death benefit. Sometimes just called ADB, this coverage may allow the covered individual to receive some of the proceeds from the death benefit during his or her lifetime. </twitter>
In some situations, the accelerated death benefit may be available to others. For example, it may be available to those who have an illness that requires an organ transplant. It may also cover hospice care for long-term needs. In some situations, the policyholder wants to take this type of plan out to help cover their day to day needs while living through their illness.
The amount of available funds, as well as the overall access to these benefits, depends on the information written into the policy. It is something to consider investing in carefully to ensure that your needs are met should this situation occur.
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