Accelerated Death Benefit Rider for Life Insurance

An accelerated death benefit rider for life insurance will help you pay for medical bills or offset other financial burdens if you are terminally ill. Accelerated death benefit riders may be included with your life insurance policy, or may have an additional cost to add the rider, depending on the company and policy. Using your rider will detract from the payout your beneficiaries ultimately receive.

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Natasha McLachlan is a writer who currently lives in Southern California. She is an alumna of California College of the Arts, where she obtained her B.A. in Writing and Literature. Her current work revolves around insurance guides and informational articles. She truly enjoys helping others learn more about everyday, practical matters through her work.

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

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Reviewed by Laura Walker
Former Licensed Agent

UPDATED: Jul 16, 2021

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The Rundown

  • An accelerated death benefit rider is a living benefits rider that allows access to life insurance proceeds, usually due to a terminal illness
  • Money from an accelerated death benefit rider can be used for medical expenses and to offset other financial burdens
  • Utilizing your accelerated death benefit rider will likely impact the amount your beneficiaries receive when you pass

You may be curious about an accelerated death benefit rider for many reasons. If you are considering using the rider — or considering adding it to a current or future life insurance policy — there are some whole life insurance basics you should know.

An accelerated death benefit rider for life insurance could be very helpful depending on your needs and current state of health.

If you are looking for an affordable accelerated death benefit rider for life insurance in your area, use our free tool above to get started.

What is an accelerated death benefit on life insurance?

An accelerated death benefit rider on your life insurance policy is something you can tap into in the event that you develop a terminal illness or have some other medical condition that dictates you likely have fewer than two years to live.

The amount of money you’re able to receive with an accelerated death benefit rider is often limited to a percentage of the policy’s death benefit value.

End-of-life care can be incredibly expensive, but your accelerated death benefit rider could help you with the costs.

This rider, often referred to as a living benefit rider, allows you to take care of the financial obligations associated with your care while also ensuring your beneficiaries still have a death benefit to assist with funeral costs, burial costs, and other expenses.

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How does an accelerated death benefit rider work?

The accelerated benefits provision will allow for early payment of the death benefit. An accelerated death benefit is less about having a payout and more about accessing some proceeds so you can handle all of your financial obligations.

Essentially, using your rider is the same as borrowing against your life insurance policy.

Access to funds from this rider can help policyholders make arrangements so their loved ones don’t have to. The amount of money you can access and when you can use it is dictated by the individual policy rider.

The money that you’re able to utilize with your accelerated death benefit rider comes straight from your life insurance policy’s death benefit. This means that the money your beneficiaries receive will be reduced by the amount that you use.

As a living benefit, this rider offers convenience and comfort when dealing with terminal illnesses.

While some may see it as a drawback that their beneficiaries receive less money from their policy (minimizing the non-accelerated death benefits), others are happy to be able to handle their expenses rather than leaving that for their family members and loved ones to handle.

Does an accelerated death benefit rider cost extra?

Most life insurance providers offer an accelerated death benefit rider as part of a policy, although in some cases the rider may need to be added on. You may have to pay higher rates for an accelerated death benefit rider on life insurance compared to a policy that doesn’t include it.

You always ask when purchasing life insurance whether adding an accelerated death benefit rider will increase your insurance rates. 

You won’t have to worry about paying taxes on your accelerated death benefit since life insurance policies are not subject to federal income tax. This is another cost you will not have to consider.

Some insurance providers do charge a one-time processing fee of anywhere from $50 to $200 to enact an accelerated death benefit rider. Shop around and compare quotes for an accelerated death benefit rider on life insurance before you buy a policy.

Is an accelerated death benefit rider for life insurance right for me?

You will not know when you purchase your policy whether you will need to use an accelerated death benefit rider. But the truth is, there is no harm in having it as an addition to your permanent life insurance policy just in case.

You will not lose any money or be charged any additional premium fees for adding this rider to your policy.

You will also receive comfort and peace of mind knowing you can count on your accelerated death benefit rider if you ever need it.

In order to find a life insurance policy that allows for an accelerated death benefit rider, you should shop around for life insurance from multiple companies.

You can enter your ZIP code below to buy an accelerated death benefit rider for life insurance today.

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