Accelerated Death Benefit Rider in Life Insurance

• An accelerated death benefit rider (ADBR), or accelerated benefit rider, allows you to use part of your death benefit while you’re still alive if you’re diagnosed with a qualifying illness or condition. 
• These riders are sometimes referred to as living benefits, since you access them while you're still alive. 
• This rider can help pay for treatment costs, daily expenses, or end-of-life care needs.
• Eligibility is based on medical criteria and occurs after diagnosis of a terminal or chronic illness, or a critical illness in some cases. Definitions vary by life insurance company.
• Using this rider reduces your policy’s remaining death benefit, since the amount taken early is subtracted from the total payout that ultimately goes to your beneficiaries.
• Many life insurance policies include accelerated death benefits automatically, while others offer them as optional riders for a small additional cost.

An accelerated benefit rider is a feature of a life insurance policy that lets you ‘accelerate’ your death benefit. This means the insurance company pays part of your death benefit early if you’re diagnosed with a qualifying illness or condition. It’s designed to provide financial help while you’re still living, often to cover medical bills, caregiving expenses, or lost income.

Depending on your life insurance company and policy, the rider may be automatically included or offered as an optional add-on for a small cost. Once benefits are paid out under this rider, the amount is subtracted from your policy’s final death benefit, reducing what your family receives later.

When you use this rider, your life insurance company pays a portion of your policy’s death benefit early. The amount you can accelerate varies from company to company, but it’s typically between 25% and 75% and depends on your particular medical circumstances. You can use this money however you choose: you can pay medical bills, modify your home for care, or cover everyday expenses during treatment.

To qualify for a payout, you must meet the policy’s definition of a qualifying illness and complete all the appropriate paperwork from your insurance company. Documentation from your physician and review by the insurer are usually required before funds are released. Common qualifying conditions typically include:

• A terminal illness with a life expectancy of 12–24 months.
• A chronic condition that severely limits your ability to perform daily activities, or results in cognitive impairment.
• A serious critical condition that is expected to impact your life expectancy.

Once approved, the life insurance company sends the funds directly to you, and the remaining benefit stays in place for your heirs.

Example: How It Works

Camille is 62 years old, and she has a $500,000 term life insurance policy that includes living benefits.

Sadly, she is diagnosed with late-stage cancer, and her medical team estimates she only has 6-8 months to live. Her diagnosis qualifies under the terminal illness provision of her rider. Her insurance company allows her to accelerate 50% of her death benefit, which is $250,000 in Camille’s case. 

Camille chooses to accelerate this amount to help with medical bills and to make her last few months as comfortable as possible. When she passes away, her children receive her remaining life insurance death benefit of $250,000. This example shows how the rider can provide both peace of mind and financial flexibility at a time when it’s needed most.

Read: What is Whole Life Insurance and How Does It Work

Many people who buy term or permanent life insurance today automatically qualify for this type of rider, since several companies include it at no additional cost. In other cases, you can choose to add it for a small premium increase when your policy is issued.

When you apply, the insurance company may review your age, health history, and policy type to confirm eligibility. If you have a serious pre-existing condition or a terminal diagnosis at the time of application, the rider might be limited or unavailable.

Once your policy is active, you’re covered under the terms of the rider, meaning you don’t need to “qualify” unless you later file a claim to use it.

A living benefitsrider can offer vital support, but it’s best used when accessing funds now would clearly improve your quality of life or reduce financial strain. Most people consider activating the rider when:

• Medical or care expenses are creating a financial burden.
• A serious diagnosis limits income or earning ability.
• You want to settle affairs, pay debts, or provide for dependents while you’re still living.
• You prefer to handle certain expenses personally rather than leaving them to your family.

However, using the rider isn’t always the best financial move. The amount you receive early reduces your policy’s remaining death benefit. Also, many insurance companies may apply an actuarial discount or reduce the payout amount to reflect early access to funds. It’s wise to weigh how much your family may need later versus how much relief you’d gain now.

Read: Accidental Death and Dismemberment vs Life Insurance

This type of illness benefit can add meaningful flexibility to your life insurance policy. It provides access to a portion of the death benefit if you are diagnosed with a serious illness, which can give you financial support when you need it most. 

Key advantages include:

• Financial flexibility: You can use the money however you choose, from covering medical expenses to easing day-to-day bills.
• Peace of mind: Knowing you have an option to access benefits can reduce stress during serious health challenges.
• Built-in protection: Many life insurance policies include this rider automatically, meaning you might already have access without extra cost.
• No restrictions on spending: Unlike some health-specific benefits, you decide how to use the accelerated payout.
• Keeps some coverage intact: Even after using part of the benefit, your loved ones still receive the remaining death benefit payment.

While these life insurance riders can provide valuable support, it’s not without tradeoffs. Understanding the potential drawbacks helps ensure you use it wisely.

Possible downsides include:

• Reduced death benefit: Any amount you access early is deducted from what your family will later receive. 
• Possible administrative costs: Many life insurance companies may apply administrative fees or an actuarial discount, which can reduce the total amount paid.
• Qualification limits: You must meet the policy’s medical criteria and provide documentation, which can take time to review.
• Potential tax implications: In certain situations, especially if you’re not terminally ill, benefits may be taxable. Always confirm with a qualified tax professional.
• Emotional considerations: Deciding to use the rider often means confronting serious health realities, which can be difficult for families.

Read: Can You Get Life Insurance if You Have Cancer

Many life insurance policies include accelerated benefit riders at no additional cost. If it’s not built in, you can often add it for a small increase in premium when you buy your policy.

When you apply for life insurance, you’ll complete a short questionnaire about your health and lifestyle. The insurance company uses this information to determine whether you’re eligible for the rider. Some simplified or guaranteed issue policies include this benefit by default, making it available even if you have mild or well-managed health conditions.

If you already have a policy, check your policy documents or contact your life insurance company to see whether the rider is included. In some cases, it can be added later through a policy endorsement or if you are converting term coverage to a permanent policy.

What to Consider Before Buying Accelerated Benefits

Before adding an accelerated death benefit rider, think through how it may fit your broader financial and family goals:

• Review your policy’s definition of qualifying illnesses and conditions so you understand when benefits can actually be used.
• Ask whether there are fees, interest charges, or limits on how much can be accelerated.
• Consider how using the rider would reduce your beneficiaries’ payout later.
• Compare policies; some include the rider automatically, while others charge extra.

This rider can be a valuable safeguard, but it’s most effective when you know exactly how it may affect you personally.

If your life insurance policy doesn’t include an accelerated death benefit rider, or if you’d rather not reduce your death benefit, there are other ways to access funds when facing serious illness or financial strain. Options vary depending on your policy type and financial situation, but may include:

• Policy loans or withdrawals: Permanent life insurance policies with cash value (like whole life insurance or universal life) allow borrowing or partial withdrawals against that value. However, it’s important to know that taking policy loans or withdrawals could also reduce your policy’s death benefit.
• Critical illness or chronic illness riders: Some insurers offer separate riders that pay a lump sum if you’re diagnosed with specific conditions, such as heart attack, stroke, or cancer.
• Long-term care insurance riders: These provide funds for ongoing care needs if you can’t perform certain daily living activities.
• Health savings accounts (HSAs): For those with high-deductible health plans, HSAs can help cover medical expenses tax-free without affecting your life insurance benefits.
• Disability income insurance: Offers monthly income replacement if you can’t work due to illness or injury.

Each option has different costs, qualifications, and effects on your coverage, so it’s best to review them with a trusted financial professional before making changes to your policy.

Read: Difference Between Life Insurance and Annuity

An accelerated death benefit rider can bring real relief during a difficult time. It lets you access part of your life insurance benefit while you’re still living, offering flexibility to manage medical bills, daily expenses, or final plans on your own terms. For many families, it’s one of the most practical and compassionate features a policy can include.

If you’re comparing coverage options, Ethos makes it easy to find a life insurance policy that includes accelerated death benefits automatically. You can check your eligibility, compare rates from top-rated life insurance companies, and apply entirely online.