Glossary

Accelerated death benefit

A policy feature that pays part of the life insurance payout early if the insured is terminally, chronically or critically ill, reducing what heirs get.

Also called: ADB, living benefit, accelerated benefit rider

An accelerated death benefit lets the policy owner collect part of a life insurance policy's death benefit while the insured is still alive, after a qualifying diagnosis. Most policies offer it for terminal illness, and many add triggers for chronic illness, critical illness or confinement in a nursing home. Some insurers include it at no upfront cost; others sell it as a rider.

The amount paid is subtracted from the death benefit, often along with an administrative fee or a discount for paying early. Hypothetical example: on a $300,000 policy, an insured with a terminal diagnosis accelerates 50%. The insurer pays $150,000 minus its discount and fees, and the beneficiaries later receive the remaining $150,000, less any policy loans.

Under Internal Revenue Code Section 101(g), payments to someone certified as terminally ill (expected to die within 24 months) are generally income-tax-free, and chronic illness payments are tax-free within federal limits. Watch two things: the money can affect eligibility for Medicaid and other means-tested benefits, and it shrinks what your family eventually receives. Compare the terms in our guide to accelerated death benefit riders with alternatives such as a viatical settlement.

Last reviewed October 4, 2026

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Related terms

Chronic illness rider A life insurance add-on that advances part of the payout if the insured can no longer perform basic daily activities or has severe cognitive impairment. Death benefit The money a life insurance policy pays to the beneficiaries when the insured dies, usually the face amount adjusted for loans, riders and dividends. Rider An optional provision attached to a life insurance policy that adds, limits or changes benefits, usually for an extra charge. Face amount The dollar amount of coverage shown on a life insurance policy's specifications page, the base death benefit before loans, riders or dividends. Viatical and life settlement providers Licensed companies that buy life insurance policies from their owners for a lump sum, then pay the premiums and collect the death benefit later.

Related guides

20-year term life insurance explained A 20-year term fixes your premium for two decades, long enough to raise young children or cover most of a mortgage. How it works, who it fits and what to check. Accelerated death benefit riders: how they work and how they're taxed An accelerated death benefit rider pays part of a life policy's death benefit early to a terminally ill insured. How it's priced and taxed under IRC 101(g). Chronic illness riders vs long-term care riders Both let a life policy pay benefits while you're alive, but they're built and regulated differently. How each pays, what each costs you, and the tax rules. What to compare between term policies besides price Two term policies with the same premium can differ on conversion, renewal, riders and insurer strength. A checklist of what to read before you choose. Critical illness riders on life insurance: how they work A critical illness rider pays part of your death benefit early after a covered diagnosis. Triggers, exclusions, tax questions and alternatives. Hybrid life and long-term care policies How hybrid life and long-term care policies pay for care or a death benefit, the 2026 $430-a-day tax limit, the costs and trade-offs, and who they suit.

Related insurers

American Fidelity A family-owned Oklahoma City insurer selling life, supplemental health and annuities at work, mainly to school, public sector and auto dealer employees. Ameritas Lincoln, Nebraska mutual holding company selling term, participating whole life, universal and variable life through advisors, plus dental and disability. Amica Life Life subsidiary of Rhode Island auto and home insurer Amica Mutual, selling term, whole life and fixed annuities directly by phone and online in all states. Assurity Lincoln, Nebraska mutual holding company and Certified B Corp selling term, whole and universal life plus disability cover through independent agents. Banner Life A large U.S. term life specialist, long sold as Legal & General America and owned since February 2026 by Japan's Meiji Yasuda; William Penn serves New York. Boston Mutual Life Canton, Massachusetts mutual founded in 1891, selling whole life, group term and accident coverage at the workplace and through general agencies.