What is an accelerated death benefit rider?

An accelerated death benefit rider is a provision included in a life insurance policy that allows the policyholder to access a portion of the death benefit while they are still living, typically when facing a terminal illness or certain specified health conditions. This feature is particularly valuable for individuals who may require financial support for medical expenses or other costs associated with their illness. By providing early access to funds, the accelerated death benefit can serve as a vital financial resource during challenging times, allowing policyholders to alleviate some of the financial stress they may be experiencing.

The other responses do not accurately describe the nature of the accelerated death benefit rider. For instance, the clause that limits payments to the policyholder only does not reflect the primary purpose of this rider, as it specifically allows the policyholder to access benefits while alive. Similarly, a rider that voids the policy in case of terminal illness is not aligned with the intent of the accelerated death benefit, which is to offer support rather than termination. Lastly, a feature that automatically increases the death benefit does not relate to the financial access provided by the accelerated death benefit, as it pertains more to adjusting the total death benefit amount rather than allowing early access.