Accelerated Death Benefit Provisions

An accelerated death benefit provision is a condition on a life insurance policy that takes effect if the holder is diagnosed with a terminal illness. If the policy holder has a terminal illness that is irreversible, then the accelerated death benefit provision allows the married or divorced life policy holder to take out a certain sum of money to pay for medication and such needs to make the final days, weeks or months more comfortable. What this means is that even if you are still alive, you can still benefit from the payout and protection your life insurance policy provides.

Having an accelerated death benefit provision on your life insurance policy is a good idea for anyone, even if you are the picture of perfect health or if you do not have any history of disease in your family. Facing a terminal illness can be hard to imagine and often it involves a lot of pain along the way. Having adequate care and medications can ensure that your final days are as comfortable as possible for you and your family.

Most permanent life insurance policies do not come standard with an accelerated death policy provision and thus you may need to add this onto your policy. It can cost a little extra but it can also provide you with adequate financial relief in case of a terminal illness. Term life insurance policies, however, usually include this provision at no extra charge. This type of coverage is often deemed 'living benefits' as you are still alive when you receive the payout.

Keep in mind, however, that the payout you receive will come out of your final payout. What this means is that if you take out $50,000 from your $200,000 policy, the only $150,000 will remain for your beneficiaries upon your death. If you take out the whole amount, which is possible in most instances, then your beneficiaries will be left with nothing.

Terminal Illness Coverage

With the accelerated death benefit provision your spouse can quit his job to stay home with you or you can hire full time care. You can receive adequate medication to relieve some of the pain and you will not have to worry about how this illness is impacting your financial situation and your family.

Unless you have an accidental death through a car accident, a work accident or another traumatic accident, you may experience a terminal illness that will lead to your death. Cancer, AIDS, organ failure - all of these things can be classified as terminal ill conditions. In general, if your doctor has given you less than one year to live, then this constitutes a terminal illness and you will be able to claim accelerated death benefits provided your policy includes this provision.

Accelerated death benefit provisions will vary from insurance company to insurance company as will the general terms and conditions. If you do have permanent life insurance then there is a pretty good chance that you will need this type of cover down the road if you do live a long life. You may be diagnosed with a terminal illness at 90 and then choose to take out the coverage. If you have a term policy, however, that only goes until you retire at 65, then an accelerated death benefit provision may not be as necessary as there is a less likely chance of contracting a terminal illness when you are young. However, as we all know, there is no predicting how life will turn out for you which is why we invest in life insurance with accelerated death benefit provisions in the first place.

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