accelerated death benefit rider Archives

What is the Accelerated Death Benefit?

A life insurance policy is a great way to make sure your family is financially protected after you’re gone, but what if you become ill and your family needs financial help while you are still alive? Luckily there is a way to get benefits from your life insurance while you are alive. When looking for a policy consider adding an accelerated death benefit rider to your policy, which will provide you with money to be used for medical expenses if you become seriously, or terminally, ill. Do you have a family history of getting sick in your later years, do you just want to be cautious, or do you just want to be cautious? No matter what the reason, before you purchase a life insurance policy, find out how an accelerated death benefit rider can benefit you, and how it works.

What Is an Accelerated Death Benefit Rider?

sick person in a wheelchair being pushed by a young female — *An accelerated death benefit rider is beneficial to those who are terminally ill, and need help paying their medical bills.*

This type of rider allows you, the policyholder, to receive a portion of your death benefits before you pass away if you become terminally ill. It is a standard feature on most term life insurance policies; if it is not included in your life insurance policy, you have the option to add on this rider for an additional monthly premium fee. Generally this rider is meant to help with medical expenses, but you can use the money for anything you choose.

How Does an Accelerated Death Benefit Rider Work?

If you have an accelerated death benefit rider, most insurance companies will pay out if the insured is diagnosed with a terminal illness, and is expected to live no more than 1-2 years past their diagnosis. Every insurance company has guidelines on how much they will pay out on an accelerated death benefit rider; some will pay anywhere from 50-75% of your policy death benefit, and some will charge a one-time processing fee, usually $150. It is best to compare policies from different life insurance companies to determine which policy will provide the coverage amount you think you might need.

It is important to note that the benefits you receive for your medical expenses will be deducted from the death benefit your beneficiary will receive after you pass away.

Qualifying For An Accelerated Death Benefit

Accelerated death benefits are best for people with shortened life expectancies, or for those who have major medical bills due to an illness. The rider is triggered under the following medical circumstances:

Terminal illness– This is the most common reason to make a claim on an accelerated death benefit rider. To receive your benefit, you will need to provide certification from your doctor or a medical professional proving that you are terminally ill and have a life expectancy of 12-24 months.
Critical illness– You can also use this rider if you are diagnosed with a condition that will leave you with a shortened life expectancy, including cancer, heart attack, stroke, kidney failure, major organ transplant, or paralysis.
Chronic condition– Any condition that prevents you from performing 2 of the 6 daily activities for living (eating, bathing, toileting, continence, getting dressed, and mobility) will also allow you to make a claim.
Long-term care– If you must be permanently confined to a nursing home, hospice care, or an assisted living facility, you can use your benefits.

An accelerated death benefit rider will provide you with extra money to help with large medical bills that stem from a terminal or critical illness. Claiming on this rider should not be confused with borrowing cash value from a whole life or universal life insurance policy, but those permanent policies will likely also have the accelerated death benefit rider built in.

To learn more about accelerated death benefits and any other riders that you think could be beneficial to you, consider using online tools to see what is available, as well as working with an agent who will help you compare plans and decide which is the right fit for you. To get you started, we have provided the top insurance companies that offer life insurance policies below; each can give you hassle-free assistance and the most competitive rates in the nation. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

7 Common Life Insurance Riders

Choosing a life insurance policy can be challenging, especially considering that basic life insurance policies sometimes don’t include the coverage you need. But the good news is that you often have the option to add one or more riders, or additional benefits, to your policy to customize it to your life and specific needs. For example, you can choose to add a disability income rider to your policy, which will help you financially in the event that you become disabled. This is just one example of a rider, but there are many different kinds that you can add on to your policy! Every policy is different, and every insurer will offer different riders, but knowing some of the most common life insurance riders can help you determine what kind of extra coverage you might need.

1. Guaranteed Insurability Rider

These riders, which are available on certain life insurance policies (like permanent life and term life), generally allow you the option to purchase extra coverage for your policy every 3 to 5 years, or even after a major life event, like getting married or having a child. The great thing about a guaranteed insurability rider? You can increase your coverage without undergoing another medical exam, so this rider is perfect for those who think their health might deteriorate in the future. It’s also a good choice if you’re currently on a tight budget, but want the option to easily increase your coverage in the future.

2. Accelerated Death Benefit Rider

Also known as living benefits, this rider will pay a portion of your death benefit while you are still alive if you are diagnosed with a terminal illness or a chronic illness that affects your daily life, or if you experience a critical illness such as a serious heart attack. This rider is available on permanent and term life insurance policies, and can help ease the financial burden of looking after someone who is chronically ill, or of end-of-life care.

caucasian man with crutches shaking a woman's hand — *If you lose your income due to an injury at work, a waiver of premium rider would exempt you from paying your policy premiums.*

3. Waiver of Premium Rider

Losing your income if you become disabled and unable to work would be a major strain on your family, especially if you are the main breadwinner in your family, but a waiver of premium rider would exempt you from paying your policy premiums until you could work again, so you wouldn’t have to worry about losing your life insurance. It applies if you are critically ill, seriously injured, or disabled, and if you are permanently disabled, you will pay for premiums by withdrawing from your death benefit. Before adding this rider, you will need to go over your terms and conditions carefully, because the term “totally disabled” differs from one insurance company to another.

4. Accidental Death Rider

An accidental death rider, also known as a double indemnity rider, will pay out two to three times the amount of your original policy to your family in the event that you pass away after a qualifying accident. Qualifying accidents do not include illegal activities and voluntary participation in dangerous activities. These riders can be added to term and permanent life insurance policies, and are especially beneficial if you have a hazardous job or are at risk of an accident at work.

5. Term Conversion Rider

This rider will allow you to convert your term life insurance policy into a whole life insurance policy without having to worry about going through the underwriting process, which could raise your rates if your health status changes. With a term conversion rider, you can bypass the underwriting process when converting your term life insurance policy into whole life insurance.

6. Child Rider

silhouette of a young girl in a wheelchair — *You can add a child rider to help pay for medical expenses and funeral costs in the unfortunate event your child passes.*

You can get life insurance for your children without a separate policy by adding a children’s term rider to your policy. In the tragic event that your child passes (until a certain age), this rider will pay a death benefit to help cover funeral costs or medical bills.

7. Long-Term Care Rider

A long-term care rider allows you to receive monthly payments if you become disabled or develop an illness that requires long-term care. This type of rider acts in a way as long-term care insurance, offsetting the expense of a nursing home or other type of long-term care.

One thing to be aware of when considering adding riders to your life insurance policy is that you cannot add one to a policy that is already active, so you need to decide what is best for you before purchasing a life insurance policy. If you are interested in buying a plan with additional riders, or switching plans to add any riders you think will be beneficial to you, consider using online tools to see what is available, as well as working with an agent who will help you compare plans and see which is the right fit for you. To get you started, we have provided the top insurance companies that offer life insurance policies below; each can give you hassle-free assistance and the most competitive rates in the nation. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

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