Under California law, an accelerated death benefit (living benefit) provision allows:

Why A is correct

An accelerated death benefit provision, governed in California by CIC §10295 et seq., lets the insured receive part of the death benefit early upon a qualifying event, typically a terminal illness, and in some policies chronic or critical illness. Payment may be a lump sum or periodic amounts. The death benefit payable to the beneficiary is reduced by the amount accelerated, and recipients should consider possible tax and public-benefit implications. The provision responds to a living need rather than only a death need, giving the insured funds while living.

Why the other options are wrong

• B) Only the insured can receive accelerated proceeds while living; the beneficiary's payment follows the insured's death. The provision exists for the insured's living needs. The benefit is meant for the insured's care and expenses.
• C) ADB is not a loan and is not an interest-free borrowing of the full face amount. It is an acceleration of a portion of the death benefit, not a loan against the policy.
• D) The benefit reduction follows the rider's disclosed terms, not unilateral insurer action without notice. Any reduction is spelled out in the rider the policyowner accepted. The rider's terms govern any change to the benefit.

Memory hook

ADB = draw your death benefit early when terminal illness gives you the diagnosis.