Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
An accelerated death benefit (living needs) provision allows a terminally ill 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), also called a living needs benefit, lets an insured with a terminal illness — often a life expectancy of 12 months or less — receive part of the death benefit while living. The amount paid is typically reduced, and the remaining death benefit is correspondingly lower. ADBs address the financial strain of a final illness without requiring the policyowner to surrender the policy.
Why the other options are wrong
- B) Only a portion of the death benefit is advanced, not the full amount; the remaining coverage is reduced accordingly.
- C) The provision is a benefit acceleration, not a loan mechanism against cash value.
- D) A viatical settlement is one alternative, but the ADB is a policy provision available directly to the insured.
Memory hook
ADB = collect part of the death benefit early when a terminal diagnosis arrives. It is a living benefit, not a loan.