Accelerated Benefit Rider: How It Works
An accelerated benefit rider is an optional add-on to a life insurance policy that allows the policyholder to access a portion of the death benefit while they are still alive. This can be helpful in a number of situations, such as if the policyholder becomes terminally ill or needs long-term care.
When you purchase an accelerated benefit rider, you will agree to pay an additional premium. The amount of the premium will vary depending on the terms of the rider and your age and health.
If you need to access the accelerated benefit, you will need to submit a claim to your insurance company. The insurance company will then review your claim and determine whether you are eligible. If you are eligible, the insurance company will pay you a portion of the death benefit, typically up to 50%.
Accelerated benefit riders can be a good option for people who are concerned about their financial security if they become disabled or terminally ill. They can also be a good option for people who need to pay for long-term care.
An accelerated benefit rider can be a valuable tool for protecting your financial security. However, it is important to carefully consider the cost, terms, and tax implications before you purchase one.
Here are some additional things to keep in mind about accelerated benefit riders:
- Not all life insurance policies offer accelerated benefit riders.
- The terms of accelerated benefit riders can vary from policy to policy.
- You may need to provide proof of your disability or illness in order to access the accelerated benefit.
- The accelerated benefit may be taxable.
