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📋 '''Accelerated death benefit''' is a provision found in many [[Definition:Life insurance | life insurance]] policies that allows a policyholder diagnosed with a terminal, and in some cases chronic or critical, illness to receive a portion of the policy's [[Definition:Death benefit | death benefit]] while still living. Rather than requiring the insured's beneficiaries to wait for a death claim, this feature advances funds — typically a specified percentage of the [[Definition:Face amount | face amount]] — to help the policyholder cover medical expenses, long-term care costs, or other financial needs during a period of serious illness. The provision may be built into the base policy at no additional cost or offered as an optional [[Definition:Rider | rider]] for an added [[Definition:Premium | premium]].

⚙️ Triggering the benefit generally requires medical certification that the insured meets defined criteria — most commonly a diagnosis of a terminal illness with a life expectancy of 12 to 24 months, though some policies extend eligibility to chronic illnesses requiring ongoing care or critical conditions such as major organ failure. Once approved, the insurer pays out a lump sum or series of payments, usually ranging from 25% to 100% of the face amount depending on the policy terms and the severity of the condition. The amount advanced is then deducted from the death benefit ultimately payable to [[Definition:Beneficiary | beneficiaries]], and the insurer may apply an actuarial discount to reflect the accelerated timing of payment. In the United States, accelerated death benefits received under qualifying circumstances are generally income-tax-free under Section 101(g) of the Internal Revenue Code, a significant advantage for policyholders facing mounting medical costs. Regulatory treatment varies in other jurisdictions: some markets, including parts of Europe and Asia, address similar needs through standalone [[Definition:Critical illness insurance | critical illness insurance]] products rather than as riders to traditional life policies.

💰 From an industry standpoint, the accelerated death benefit has reshaped how consumers and advisors perceive the value proposition of life insurance. It transforms a product traditionally viewed as a posthumous financial tool into one that can deliver tangible, living benefits — an evolution that has proven especially compelling in markets where public healthcare systems may not fully cover the costs of terminal or chronic illness. For [[Definition:Insurance carrier | carriers]], offering competitive accelerated death benefit provisions has become a meaningful differentiator, and [[Definition:Insurtech | insurtech]] platforms have streamlined the claims process by enabling digital submission of medical documentation and faster adjudication. The provision also intersects with [[Definition:Life settlement | life settlement]] markets: policyholders who might otherwise sell their policies to third-party investors for immediate cash can instead access funds directly from the insurer, often on more favorable terms. Across jurisdictions, regulators have generally encouraged the availability of accelerated death benefits as a consumer-friendly feature, though specific disclosure requirements and eligibility standards vary.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Death benefit]]
* [[Definition:Life insurance]]
* [[Definition:Critical illness insurance]]
* [[Definition:Rider]]
* [[Definition:Life settlement]]
* [[Definition:Terminal illness]]
{{Div col end}}

Definition:Accelerated death benefit - Revision history

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