Term Life Insurance Articles
The Benefits Of An Accelerated Death Benefit
2009-12-07
When buying term life insurance, there are a lot of important decisions that you have to make in order to obtain a policy that's right for you. Very commonly, policy buyers will spend a lot of time considering beneficiaries, policy value and other designations that will affect how their policy is used after they die. However, there are also considerations that should be made involving how the policy is used while the policyholder is still alive. One such factor is the accelerated death benefit, which is available on a variety of policies. An accelerated death benefit pays a policyholder a certain amount of the policy's overall value when the policyholder has been diagnosed with a very serious or terminal disease.
Under many policies, the accelerated death benefit pays out 25 percent of the total value of the policy once the life insurance company has received proof of the illness (and once the illness is confirmed to be terminal). This money is intended for use to cover medical expenses. In many cases, the money from an accelerated death benefit will help to keep the policyholder alive for several more months or even years. Then, when the policyholder does die, the rest of the money from the term life insurance policy is given to his or her beneficiaries. This money is not affected in any way by the release of the accelerated death benefit, besides the fact that there is less to pay out.
Depending on the wishes of the policyholder, the accelerated death benefit can be seen as either a great addition or an unnecessary extra to a policy. Like any life insurance consideration, there are good and bad sides to this special consideration. For instance, it should be noted that opting for an accelerated death benefit may increase a the amount of a life insurance quote. In the end, the extra cost of premiums may offset the potential benefits. However, it's also important to point out that accelerated death benefit payouts can be used for any purpose, and they won't be withheld if they're not used on medical expenses. Therefore, a policyholder might use his or her accelerated death benefit to improve his quality of life or to live outside of a hospital when afflicted with a serious disease. There are also plans available that allow for the release of more than the typical 25 percent of the benefits.
Studying the terms of your life insurance policy can help you determine whether to activate this special condition. Doing so will also help you to know how your policy will ultimately be handled. Be sure to research terms that you don't understand in order to get the most out of your insurance policy.
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When buying term life insurance, there are a lot of important decisions that you have to make in order to obtain a policy that's right for you. Very commonly, policy buyers will spend a lot of time considering beneficiaries, policy value and other designations that will affect how their policy is used after they die. However, there are also considerations that should be made involving how the policy is used while the policyholder is still alive. One such factor is the accelerated death benefit, which is available on a variety of policies. An accelerated death benefit pays a policyholder a certain amount of the policy's overall value when the policyholder has been diagnosed with a very serious or terminal disease.
Under many policies, the accelerated death benefit pays out 25 percent of the total value of the policy once the life insurance company has received proof of the illness (and once the illness is confirmed to be terminal). This money is intended for use to cover medical expenses. In many cases, the money from an accelerated death benefit will help to keep the policyholder alive for several more months or even years. Then, when the policyholder does die, the rest of the money from the term life insurance policy is given to his or her beneficiaries. This money is not affected in any way by the release of the accelerated death benefit, besides the fact that there is less to pay out.
Depending on the wishes of the policyholder, the accelerated death benefit can be seen as either a great addition or an unnecessary extra to a policy. Like any life insurance consideration, there are good and bad sides to this special consideration. For instance, it should be noted that opting for an accelerated death benefit may increase a the amount of a life insurance quote. In the end, the extra cost of premiums may offset the potential benefits. However, it's also important to point out that accelerated death benefit payouts can be used for any purpose, and they won't be withheld if they're not used on medical expenses. Therefore, a policyholder might use his or her accelerated death benefit to improve his quality of life or to live outside of a hospital when afflicted with a serious disease. There are also plans available that allow for the release of more than the typical 25 percent of the benefits.
Studying the terms of your life insurance policy can help you determine whether to activate this special condition. Doing so will also help you to know how your policy will ultimately be handled. Be sure to research terms that you don't understand in order to get the most out of your insurance policy.
