An accelerated death benefit (living needs) rider allows the insured to:

Why A is correct

The accelerated death benefit (ADB) rider lets the insured receive part of the death benefit while alive, typically upon diagnosis of a terminal illness with a limited life expectancy (commonly 12 months or less) or a qualifying chronic illness under California rules (CIC §10295 et seq.). The amount received reduces the death benefit payable to the beneficiary, and the payment is often income-tax free. It is not an interest-free loan of the full face amount, is not accidental-death double indemnity, and is payable only for qualifying health conditions, not for any reason.

Why the other options are wrong

• B) The rider advances a portion of the death benefit for a qualifying terminal or chronic illness. It is not an interest-free loan of the full face amount available at any time.
• C) Double indemnity for accidental death is provided by a separate accidental death benefit rider, not by an accelerated death benefit rider.
• D) Acceleration is limited to terminal illness or qualifying chronic illness triggers. It is not available for any reason before death.

Memory hook

Terminal news, early check: the policy pays part of the death benefit while life remains.

Why A is correct

An accelerated death benefit (living needs) rider permits an insured diagnosed with a terminal illness to draw down a portion of the death benefit while alive, often as a lump sum or periodic payments. The death benefit payable to the beneficiary at death is reduced by the amount advanced, and interest or fees may apply. This provides funds for medical care or final expenses when they are needed most.

Why the other options are wrong

• B) The accelerated payment reduces the remaining death benefit; the full benefit is not paid on top of the cash value.
• C) The rider does not double the benefit; it advances part of the existing benefit early.
• D) The rider is not an annuity conversion feature.

Memory hook

Accelerated death benefit = spend part of your life insurance while you are still alive to pay for the end. Benefit minus advance.