Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
An accelerated death benefit (living needs) provision 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 provision, also called a living needs benefit, lets the insured collect part of the death benefit before death, typically when diagnosed with a terminal illness expected to result in death within a defined period, or for specified conditions such as a chronic illness. The amount advanced reduces the death benefit payable to the beneficiary. Accelerated benefits are not loans, so no repayment is required, and they are designed to relieve financial strain during the insured's final months.
Why the other options are wrong
- B) An accelerated benefit is an advance of the death benefit, not an interest-free loan to be repaid.
- C) A viatical settlement involves selling the policy to a third party, a different transaction from an accelerated benefit.
- D) The accelerated benefit is not tied to a specific disease such as cancer for terminal-illness triggers.
Memory hook
Accelerated death benefit = tap the death benefit early when terminal; the beneficiary gets what is left.