What is an Accelerated Death Benefit Rider

Based on the survey, in India, more than 37% percent of residents suffer from at least one health condition. So, the need for an Accelerated death benefit rider becomes a necessity. Many of you must be unaware of this in-built optional cover.

Life insurance includes additional riders that allow policyholders to enhance their base cover and give extra protection against specific conditions. An accelerated death benefit rider allows you to claim a portion of your life cover early in case you are diagnosed with critical illness.

However, the list of qualifying critical diseases may vary from insurer to insurer. Let's understand more about accelerated death benefit riders.

Accelerated Death Benefit Rider Charges

Accelerated Death Benefit is an add-on feature available in certain life insurance policies. You can add this rider to your life insurance policy at just nominal charges of up to Rs. 300 or Rs. 500 monthly. If you take out a loan against your policy, your accelerated benefit will be paid minus the loan amount. So when insurers pay your dependents the life cover, they deduct the accelerated benefit you withdrew plus interest.

Who Qualifies for an Accelerated Death Benefit

To opt for an accelerated death benefit ride, you must submit some medical certification approved by a doctor or medical professional stating you've been diagnosed with a critical or terminal illness. However, the document must state that your life expectancy is fewer than 12 to 24 months.

You may still qualify for accelerated benefits if you're not terminally ill. Few insurance providers allow you to claim an accelerated benefit if you are diagnosed as critically ill, chronically ill, or need long-term care. But before making any decisions, have a word with your insurer to confirm your eligibility for this rider.

How Can I Add Accelerated Death Benefit Rider to Policy

Some insurers offer accelerated death benefit riders with a base plan of your life insurance policy. If not, you can contact your insurance provider and ask them to add this rider to your plan. Please note that you may have to provide some medical document stating that you've developed a qualifying serious condition or terminal illness before you can opt for this rider.

Advantage and Disadvantage of Accelerated Death Benefit Rider

Each add-on covers some inclusions and exclusions. So it's important to understand it briefly before buying it.

Inclusion

• You can claim some portion of your death benefit if you're diagnosed with a qualifying critical illness.
• You'll get a lump sum payment, which you can use to pay the hospital bills, alleviating your financial stress.

Exclusion

• Your insurance will state qualifying events that enable you to use the rider.
• Please note that some specific diseases qualify for it.

How Accelerated Benefit Riders Work

Accelerated benefit riders have become a basic necessity for those who have a higher chance of getting critical illness in the future.

Under certain conditions, policyholders can claim an accelerated benefit while they are alive. Policyholders can use lump-sum amounts to pay the medical bills of chronic or critical illness.

However, they are still entitled to any remaining cash value and death benefit. You also have the flexibility to choose the benefits payout - they can select either a lump sum or periodic payment.

Types of Accelerated Benefit Riders

Other Term Insurance Riders

Accidental Death Benefit Rider

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Accidental Disability Benefit Rider

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Critical Illness Benefit Rider

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Waiver of Premium Rider

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Income Benefit Rider

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Conclusion

Accelerated death benefit rider, often referred to as living benefits rider. Under this rider, you can avail some portion of your life cover while you're still alive. However, you can add this rider to your basic plan in exchange for extra premiums. The lump sum money can be used for medical expenses throughout your treatment.