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Accelerated Death Benefit Options

Accelerated death benefit options are available to policy holders given a year or less to live. If you are diagnosed with a terminal illness, you may be wondering how you and your family will be able to afford the medical care you need while you are still alive. Accelerated death benefits are often the only option to affording the health care costs associated with a terminal diagnosis, or accidental death or dismemberment policies.

What ADB's Are

Accelerated death benefits are cash advances against a policy holder's life insurance policy that can be used by the policy holder in the event of a diagnosis of a terminal illness. This cash can be used to pay for any treatments, medications or other health related costs necessary to keep the policy holder alive. Accelerated death benefits, or ADB, are typically available for policy holders given one year or less to live.

Accelerated death benefits will often go into effect when a policy holder is diagnosed with a medical condition that will result in death unless extensive care or treatment is done. ADB's can be used for long term care, nursing home or hospice care, medications or other treatments needed as a result of the terminal illness diagnosis. Health care is expensive. ADB's allow a policy holder to take control of the expense of their necessary medical care without saddling their loved ones with the cost.

The accelerated death benefit will often be 25 to 50% of the death benefits and may be paid to the policy holder in monthly installments or as one lump sum. The beneficiary of the policy would then receive the remainder of the death benefits after the death of the policy holder, like with a standard life insurance policy. An ADB allows the policy holder to pay for their health care while ensuring that their beneficiaries will still be receive the payout from their life insurance policy after their death.

Details of ADB's

Started in 1988 to provide financial assistance for AIDS patients struggling to pay for treatments and medications to keep them alive, ADBs may be included in a life insurance policy or be added as a rider to an existing policy. There may be an additional fee to include accelerated death benefits are part of the policy or as a rider. The Accelerated Death Benefits paid to the policy holder may be considered income and may affect Medicaid benefits. These payouts are considered tax exempt by the Federal government, however.

If you are diagnosed with a terminal illness or have a heart attack, stroke, coronary bypass, kidney failure or certain cancers and your life expectancy is less than one year, you may be able to take advantage of your ADB's, depending on your policy. Some medical conditions, such as AIDS, an organ transplant, blindness, loss of a limb or paralysis may limit the dollar amount of the accelerated death benefit paid to you. Different policies will have different terms so you should read your policy closely to see what is covered and when.

Accelerated death benefit options allow terminally ill people to utilize cash from their life insurance policy to ensure that they can pay for the necessary medical care they need to live. If you are terminal and have been given one year or less to live, accelerated death benefits can relieve some of the financial burden on yourself and your loved ones. You can use the cash from your ADB's to pay for the medical care you need while you are still alive while still leaving the remainder of your benefits for your loved ones.

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Benefits of Term Life Insurance

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• Coverage for any final expenses
• Significant death benefit

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