Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
A life policy includes an accelerated death benefit (ADB) rider. If the insured is diagnosed as terminally ill, the rider allows the insured to:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
An accelerated death benefit (living benefits) rider allows the insured to collect part of the death benefit before death when certain conditions are met, most commonly a terminal illness diagnosis. California regulates ADB provisions under CIC §10295 et seq., and the accelerated amount may be paid as a lump sum or in installments, reducing the death benefit the beneficiary ultimately receives. It is not a doubling of benefits, an annuity conversion, or an interest-free loan; it is an early payment of a portion of the death benefit.
Why the other options are wrong
- B) ADB pays part of the existing death benefit early; it does not increase the total amount payable.
- C) ADB does not convert the policy into an annuity; it accelerates death proceeds.
- D) ADB is not a loan and does not relate to cash-value borrowing; it is a partial early benefit payment.
Memory hook
ADB = the policy pays you while you are here, so terminal care does not drain the family's savings.