A policy owner who anticipates death or develops a life-threatening condition may obtain proceeds from a life insurance contract. These proceeds are known as?

• A. Death benefits
• B. Accelerated benefits
• C. Living benefits
• D. Terminal benefits

Answer: (B)

Accelerated benefits are provisions that let a policyowner access part of the death benefit before the insured dies when diagnosed with a terminal or life-threatening condition. This is a living benefit used to cover medical or related expenses, and it reduces the death benefit payable to beneficiaries later. The death benefit is normally paid at death, not before, and terms like terminal or living benefits aren’t the standard way to name this early payout in most policies; accelerated benefits specifically describe taking part of the death benefit early due to serious illness. For example, taking a portion of the death benefit early will leave a smaller amount to be paid to beneficiaries after death.