Pros and Cons of Accelerated death benefits (ADB). Without a doubt living benefits are definitely a valuable addition to any life insurance policy. Although there are certain elements that should be considered before purchasing a product that carrys living benefits, or even adding them to a current policy.
The Accelerated Death Benefit
The Accelerated Death Benefit grants life insurance policy holders some of there death benfefit prior to there passing. The policyholder has to be critically, chronically, or terminally ill and most of the time will have a life expectancy of 2 years or less. While receiving the benefits the policyholder has to continue to pay the policys monthly payments.
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Pros and Cons Of Accelerated Death Benefits
Recieving a portion of your death benefit prior to your passing
Recieving a portion of the death benefit prior to passing allows the policy holder to do watever they want with the some that is acquired. Whether its used for hospice, assisted living, home care, medical bills etc.
Accelerated Death Benefits do not have to be re-paid
Rather than having to re-pay ADB’s the loan amount is deducted from the face amount whenever the benefit is due. This gives the policy holder one less thing to worry about getting into the policy.
No exam policies available
Although this doesnt apply to everyone, this is imporant because some people may not like needles or are not fond of blood work and other such things. Even with it being a little more expensive, some policy holders are still willing to pay that extra money.
The policy holder must be critically, chronically, or terminally ill for eligibility
This is really the only major setback when it comes to ADB’s. Asside from them being a little pricy, the fact that the policy holder has to have a life expectancy of less than 2 years makes this a very prominent con in terms of Accelerated Death Benefits.
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