Getting a life insurance policy is usually a selfless act. We get a policy and pay for it, simply for the fact that we want those we care about to go on living a life we are able provide for them. Essentially, it’s continuing to take care of your financial responsibilities beyond the grave. However, there are a few add on’s available to your life insurance policy that can sometimes provide a benefit to you. One of these add on’s is known as the Accelerated Death Benefit Rider.
The Accelerated Death Benefit Rider aka Terminal Illness Rider provides protection against the unexpected diagnosis of being terminally ill. Let’s talk about what it is, how to get it and answer some frequently asked questions.
In short, here is what you need to know about this rider:
- It gives you a portion of the death benefit amount of your life insurance policy if you have less than 12-24 months to live.
- The typical amount given is 50% of the coverage amount, although this can vary based on product types.
- You can use the money as you see fit, with no penalties.
- The amount will be subtracted from the death benefit, which means when you finally die, your beneficiaries will only receive what’s left over of the total coverage amount.
- The money will be paid out as specified during the conception of the policy. It will either be a lump sum or a monthly payment.
- If you beat your illness or outlive it, you don’t have to pay the money back.
- Most of the time an Accelerated Death Benefit Rider comes included in the policy at no extra cost. However, this is something you want to double check with your agent.
- If you have a history of terminal illness in your family, then it’s a good idea to have this added on to your life insurance policy.
That’s the gist of what this rider entails. If you’re ready to start doing your life insurance shopping contact us or compare rates on our quoter. Otherwise, let’s discuss the Accelerated Death, Terminal Illness Rider in detail.
What is an Accelerated Death Benefit and How Does it Work?
The Terminal Illness Rider is an add on to your life insurance policy that will “accelerate” a portion of your death benefit if you were diagnosed as having less than 12 to 24 month’s to live. The amount of money you get will depend on the policy type. Typically, it’s in the average of about 50% of the death benefit amount, but can go up to 90% depending on the company. For example, if you have a $1,000,0000 life insurance policy and your doctor suddenly discovered you have less than 12 month probability of life left, you would receive $500,000.
What Can I Use the Money For?
The great part about this rider is that the money is yours to do with as you please. Normally, it can be used to help cover the medical costs of having to fight the illness or to check off your bucket list. Or you can use it to spoil your family or what otherwise were to be your beneficiaries if you passed. So to clarify, there is no specific requirement on how the money should be spent. That being said, it also doesn’t mean that you have to spend it all. If you beat your illness or have checked off your bucket list with funds remaining, you can leave it to your beneficiaries.
What Happens if I Don’t Die?
In the best case scenario that you beat your terminal illness or outlive the life expectancy, you don’t have much to worry about. The life insurance companies don’t penalize you for being a champ and beating the odds. However, the money does come out of the total death benefit amount. What does that mean for you? That means when you finally do die, your beneficiaries will only receive what’s left over the original policy. Let’s use the earlier example of a $1,000,000 policy for demonstration. If you were diagnosed with a terminal illness, and your policy included a 50% Accelerated Death Benefit Rider then you would get $500,000. If you spent all of it and beat the illness, it would be subtracted from the $1,000,000. So now if you die at a later date, your beneficiaries will get the $500,000 that’s left over.
How Do I Buy It and How Much Does It Cost?
When you’re in the process of buying a life insurance policy, you will have an option to include riders. The Accelerated Death Benefit Rider is one of the most popular riders out there. Normally, it actually comes with the policy you buy. Make sure to always double check with your agent if the policy you’re applying for includes this add on.
If it doesn’t come with the policy, then adding it may cause a premium increase, however, most of the time the quotes you see on the quoter will have policies that already include this rider at no extra cost. Basically, in most cases, it is a free add on that comes with the policy. If you’d like to compare quotes simply visit our quotes page from the menu above or use the quoter on this page.
Who Should Get It?
Overall, a Terminal Illness Rider is like life insurance, you don’t know when or if you’ll use it, but it’s good to have. However, if you have a history of terminal illness in the family, then it’s best to make sure you get this added on top of your policy. Outside of genetic history, it does provide the peace of mind of knowing you have that benefit just in case.
Where to Get It?
The good news is you don’t have to search any further. InsureChance is an independent agency that represents all the top A rated carriers on the market to get you the best rate on the market. The better news is that we do all of this at no extra cost to you. Most of our policies come with the Accelerated Death Benefit Rider attached to the policy. So if you want to begin your shopping process, use our quoter or call us at 888-492-1967. If you have any other questions, feel free to hit the chat button below. Welcome to InsureChance!
