What happens to the death benefit if the insured is diagnosed with a terminal illness under accelerated benefits?

• A. Nothing changes.
• B. The policy is canceled.
• C. An accelerated portion is paid of the death benefit.
• D. The premiums double.

Answer: (C)

An accelerated death benefit lets a terminally ill insured receive part of the policy’s death benefit early. The money is paid now and the amount of the death benefit that would be paid later is reduced by that same amount. The policy generally stays active, and premiums don’t suddenly double because of this; instead, the remaining death benefit is whatever is left after the accelerated portion is taken out. This is why the correct understanding is that an accelerated portion is paid of the death benefit.