An accelerated death benefit (ADB) is a type of rider that can be attached to a life insurance policy that enables the insured person to receive cash benefit against the death benefit in the case of being diagnosed with a terminal illness and have less than a year to live.
An insurance policy with an accelerated death benefit (ADB) allows the policyholder to pay for their daily living expenses in an effort to make it as comfortable as possible while also allowing the holder to look after his or her family once they pass away. The cost of a living benefit can vary according to the insurance company and policy. If the coverage is already included, the cost will be included in the policy. If not, then you will have to pay a fee or a percentage of the death benefit.
The policy spells out how much of the death benefit is available before death. Usually, It’s capped at $250,000 to $500,000. The policyholder can use the proceeds for anything, such as paying medical bills or living expenses. Even though the insurer offers the rider free, the company may charge a fee if it is exercised.