4.2.4 Accelerated Benefits
The accelerated benefits provision allows the policyowner to withdraw the death benefit prematurely in cases of terminal or chronic illness. Within limits, these funds can be withdrawn tax-free.
If the policyowner is diagnosed with terminal cancer, for instance, the funds can be used for treatment expenses, helping to eliminate some financial struggles. Individuals suffering from AIDS, cancer, heart disease, Alzheimer's disease, or other terminal or severe chronic illnesses can benefit substantially through this feature.
In order to qualify, a licensed health care practitioner must have certified within the previous 12 months that the person:
- is unable to perform, without substantial assistance, at least two activities of daily living for at least 90 days due to a loss of functional capacity;
- has a similar level of disability as defined by regulations; or
- requires substantial supervision to protect the person from threats to health and safety because of severe cognitive impairment.
Accelerated benefit provisions are standard in most individual and group life insurance policies.
