What Is an Accelerated Option?

An accelerated 💦option is a clause in an insurance contract that all🔯ows the policyholder to receive part of the cash benefit sooner than it would normally be paid.

Accelerated options, also referred to as accelera🍰ted bene♛fits, normally come in the form of a rider to a contract.

Understanding Accelerated Options

An accelerated option clause can be added to various insurance contracts, including life insurance policies. Whole, universal, and other types of permanent life insurance come with the accelerated benefit option. So꧟me term life, group life, and group term life providers also offer this option.

These options ༒can be added when the life insurance policy is first purchased or, in some cases, when a policy is already in effect.

The terms and c🐼onditions almost always include a provision for benefits if the policyholder becomes terminally ill. Accelerated options can also be activated when long-term 🌳care is needed or when there is a medically incapacitating condition.

Cost of the Option

The life insurance company will deduct the payment of the accelerated benefit from the deatꦚh benefit it ultimately pays to t𒅌he beneficiary.

An accelerated life option comes at an addi𒊎tional cost to the policyholder🦹. The cost is normally calculated as a percentage of the original premium for the policy.

Many insurance companies don't charge a separate premium for the accelerated life option unless the policyholder actually uses it. If the 澳洲幸运5官方开奖结果体彩网:insurance com🌊pany pays out the benefit before the policyholder's death, it may reduce 🐠the payout and charge a small fee for doing so.

Special Considerations

Insurance companies may have conditions regarding when a policyholder can receive an accelerated benefit. For examp🍬le, the contract may state that an insured party must be at a certain point near death before taking advantage of the accelerated option.

In addition, the company may put a limit on how muc🧸h of the total benefit can be withdrawn. Early payments may range from 25% to 100% of the total death benefit.

When a policyholder receives a partial benefit from an accelerated option, it decreases the final or death benefit of the policy by that same amount.

As noted above, accelerated options generally appear as a contract rider. A rider is a special provision that makes an amendment or adds a benefit to a policy. Riders typically provide policyholders with additional covera♓ge to meet their needs.