Which option provides a living benefit in life insurance by allowing access to a portion of the death benefit before death under qualifying conditions?

• A. Accelerated death benefit
• B. Return of premium rider
• C. Interest-only rider
• D. Cash value withdrawal

Answer: (A)

Accessing a portion of the death benefit before death under qualifying conditions is a living benefit offered by some life insurance policies, known as the accelerated death benefit. This rider lets you receive part of the death benefit early when you’re diagnosed with a qualifying condition such as terminal illness (and sometimes chronic or critical illness, depending on the policy). The money is paid out to help with medical or living expenses, while the death benefit is reduced by the amount you received. This can provide crucial funds while you’re alive and may be tax-free under certain policy terms, though specifics vary by plan.

Other options don’t fit this living-benefit concept. A return of premium rider refunds premiums if the policy ends or reaches a certain stage, but it doesn’t access the death benefit early. An interest-only rider relates to loans against the policy and interest payments, not a living benefit from the death benefit. Withdrawing cash value is accessing the policy’s savings, not the death benefit portion, and it can reduce the death benefit when loans or withdrawals are outstanding.