Serious or life-threatening illness often causes emotional
strain and financial burdens. To provide choices to those who are seriously or
terminally ill, many life insurance companies now make it possible for
policyholders to collect all or part of their death benefits early, thus
relieving some of that financial burden.
Accelerated benefits, sometimes also known as "living
benefits," are the proceeds of life insurance policies that are paid to
policyholders before they die. These benefits are sometimes included in
policies when they are sold, but life insurance companies generally offer them
as riders or attachments to new or existing politics.
As you read this pamphlet, it's important to remember that
accelerated benefits are not intended to replace health insurance or long-term
care insurance. They can, however, help out with the great financial needs that
frequently result from terminal or catastrophic illnesses. But, collecting
accelerated benefits will reduce or eliminate life insurance coverage, so
policyholders must carefully consider the needs of their intended
beneficiaries; they will receive either a reduced payment or no payment at all
when the policyholder dies.
The number of life insurance companies offering accelerated
benefits has grown dramatically in the last few years. Today, more than 150
companies offer some type of accelerated benefits, and more than 3 million
policyholders have these options in their policies.
If you've already got a life insurance policy, call your producer to
find out if accelerated benefits are available to you. *Also, be aware that a
growing number of companies are adding these benefits to new individual and
group life insurance policies. For information on group life policies, call
your human resources department or union to find out if accelerated benefits
have been added -- or can be added -- to your employer's group life insurance
*If you have some general questions about life insurance that are not answered
in this booklet, call the National Insurance Consumer Helpline at (800)
NICH is a consumer information telephone service sponsored by
insurance industry trade association. Trained personnel and licensed producers
are available to answer questions about various insurance matters, to refer
consumer complaints to appropriate sources and to send consumer brochures on
The Helpline operates from 8 a.m. to 8 p.m. Eastern Time,
Monday through Friday.