What is the purpose of an "accelerated death benefit"?

The purpose of an "accelerated death benefit" is to allow policyholders to receive part of their death benefit upon being diagnosed with a terminal illness. This feature provides financial relief to individuals who are facing significant medical expenses or wish to utilize their benefits while still alive, possibly to fund care or fulfill personal wishes before passing away.

When a policyholder qualifies for this benefit, they can access a portion of their death benefit, thus providing essential support during a challenging time. This option is particularly advantageous as it allows for quicker access to funds, bypassing the need for the beneficiary to wait until after the policyholder's death for the full payout. This approach can alleviate some of the stress and burden associated with terminal illnesses.

In contrast, other options are not aligned with the fundamental goal of an accelerated death benefit. For instance, extending the policy, increasing the death benefit payout, or providing tax advantages regarding cash value do not directly address the specific situation of accessing funds due to terminal illness.