Which of the following is considered to be an alternative to a life settlement?

• A. Term rider
• B. Accelerated death benefit rider
• C. Disability rider
• D. Spouse rider

Answer: (B)

When someone considers options for using a life policy without giving up ownership, a living-benefit feature is a key alternative. An accelerated death benefit rider is designed to let the policyowner access a portion of the death benefit early if they’re diagnosed with a terminal, chronic, or critical illness or need long-term care. The funds can be used now for medical expenses or caregiving, providing liquidity while alive. This means you get value from the policy without selling it to a third party, which is why this rider functions as an alternative to a life settlement. Keep in mind that any amount accelerated reduces the death benefit payable later, and terms can vary by policy.

The other riders don’t fit this role. A term rider adds temporary life coverage and doesn’t provide early access to the policy’s value. A disability rider may waive premiums or provide disability coverage, but it isn’t about accelerating a portion of the death benefit. A spouse rider extends coverage to a spouse, not a living benefit or liquidity option for the policyowner.