An accelerated benefit rider allows you to:
An accelerated death benefit rider, also known as a terminal illness rider, is a supplemental life insurance product that gives you early access to your death benefit if you’re diagnosed with a terminal illness. If you’re given a short time to live, an accelerated benefit for terminal illness rider pays out a portion of your life insurance policy while you’re still living.
So, what does an accelerated death benefit rider mean for your family? These terminal illness benefits mean you have the financial freedom to put your affairs in order, travel, pay for end-of-life care, or cover anything else you need.
An accelerated benefit rider for terminal illness often comes with Fidelity Life policies at no extra cost. This rider goes into effect once a medical professional confirms your diagnosis and short life expectancy.
An accelerated benefit, or terminal illness rider, is typically available for healthy adults between 18 and 85 years of age who qualify for a Fidelity Life RAPIDecision® Final Expense or the RAPIDecision® Guaranteed Issue policy. If you already have an illness which could be terminal in the near future, such as cancer or late stage kidney failure, you will usually not qualify for this rider.
Wondering whether an accelerated death benefit rider is right for you? Here’s a brief look at how it can help meet your needs.
If you are diagnosed with a terminal illness and expected to have a short life expectancy, an accelerated benefit (or terminal illness benefit rider) rider will allow you with withdraw a portion of your normal death benefit. You may withdraw up to the lesser of $100,000 or 50% of the death benefit. The rest of your death benefit remains payable to your chosen beneficiaries upon your death.
You can use this money however you see fit. If you survive longer than doctors expected, nothing changes – your life insurance still remains in effect. You will still pay your premiums, and your remaining death benefit will stay in effect. It’s best to consult with a tax professional to better understand any tax consequences of an accelerated death benefit.
If you qualify for a Fidelity Life RAPIDecision® Final Expense or the RAPIDecision® Guaranteed Issue policy, you can add an accelerated benefit rider to your policy. This terminal illness benefit is available at no additional premium charge to you.
No. An accelerated benefit rider must be provided when the policy is purchased, and cannot be added at a later date.
If you receive a terminal diagnosis from a medical professional and have an accelerated benefit rider, you can use the money any way you see fit.
You may use it for medical care or to enhance your comfort while you’re ill. You can use it to work less or stop working so you can spend more time with your family. An accelerated death benefit can be used for travel. It can be distributed while you’re living to relatives, close friends, and chosen charities. You can even use it to pay off your mortgage or pre-pay your funeral expenses.
If you have an accelerated benefit rider and are given a terminal diagnosis but still feel well, you may want to spend as much quality time with loved ones as possible. You could withdraw a percentage of your life insurance policy death benefit before you die, and use that money as you see fit. If you later die from that illness, your beneficiary will receive the remaining amount of the death benefit.
If you receive a terminal illness diagnosis and are given a short period to live, you can withdraw the set percentage of your life insurance policy death benefit per the terms of your accelerated benefit rider. If you then live longer than your initial life expectancy and continue to pay your premiums, your beneficiary receives the remaining death benefit when you pass.
For example, Betsy has a $200,000 life insurance policy with a terminal illness rider. She is diagnosed with end stage renal failure and given six months to live. She withdraws $80,000 (40%) of her death benefit, and distributes it personally to her relatives, closest friends, chosen charities, and pays off some debts. Betsy continues to pay her premiums, outlives her diagnosis, and dies 8 months later. Her beneficiary receives the remaining $120,000 (60%) of the death benefit.
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