What is the purpose for having an accelerated death benefit on a life insurance policy?

• A. It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill
• B. Increases the death benefit upon death
• C. Funds long-term care expenses
• D. Reduces annual premiums

Answer: (C)

An accelerated death benefit lets the policyholder access part of the death benefit while the insured is still alive, primarily to help cover qualifying needs like long-term care. The main purpose is to provide funds to pay for long-term care expenses, reducing the burden on the insured and family during a time when care is costly and time-consuming.

This isn’t about increasing the death benefit later—any amount advanced typically reduces the death benefit payable later. It’s also not about lowering premiums. While some plans allow access to funds if the insured is terminally ill, the key idea most aligned with the option here is using those funds to pay for long-term care.