An accelerated death benefit (living needs) rider allows the insured to:
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Answer & full 3-part explanation (select an option above, or peek)
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.