An accelerated death benefit (living needs) rider allows a policyowner who is diagnosed with a terminal illness to:

Why A is correct

An accelerated death benefit rider, also called a living needs or living benefit rider, permits the policyowner to receive a portion of the death benefit in advance if the insured is diagnosed with a terminal illness, typically with a life expectancy of one year or less, though policy terms vary. The amount paid is generally the face amount reduced by an interest discount and any outstanding loans. The remaining death benefit is reduced proportionately. This rider provides funds for medical care and final expenses during the insured's lifetime.

Why the other options are wrong

• Accelerated benefits are an advance payment, not a loan; the amount received is not borrowed and is not repaid to the insurer. This choice does not fit the arrangement described in the question, so it is clearly not the right option to choose.
• The rider reduces the death benefit at death, not doubles it; double indemnity is a separate accidental death benefit feature. Accordingly, this option is not correct because it does not match the specific rule or product that is described in the question.
• The rider does not change who is insured; it accelerates payment of the existing benefit for the named insured. This option therefore does not match the facts presented in the question and is not the correct answer to select.

Memory hook

Terminal illness triggers the living needs rider, which pays the benefit early.