Which statement is TRUE regarding accelerated benefits?

Which statement is TRUE regarding accelerated benefits?

• A. Accelerated benefits must provide for a lump sum benefit option.
• B. Accelerated benefits may only be paid as periodic installments.
• C. Accelerated benefits are not available under group policies.
• D. Accelerated benefits require a separate rider.

Answer: (A)

Accelerated benefits let a policyowner access part of the life insurance death benefit while the insured is still alive, usually due to a qualifying illness. The crucial idea is that this feature provides cash not at death, but early, to help cover medical expenses, care, or other urgent costs. The statement that is true reflects how these riders are typically structured: they must offer a lump-sum option so the insured can convert part of the death benefit into cash immediately. This lump-sum option is the form most people expect when they access accelerated benefits, providing quick liquidity for pressing needs. Some plans also offer other payout methods, like installments, but those do not negate the requirement or common practice of including a lump-sum option. Group policies can include accelerated benefits, and they aren’t restricted to a separate rider in every case. The main point remains: the lump-sum option is a standard, expected feature of accelerated benefits.

Accelerated benefits let a policyowner access part of the life insurance death benefit while the insured is still alive, usually due to a qualifying illness. The crucial idea is that this feature provides cash not at death, but early, to help cover medical expenses, care, or other urgent costs. The statement that is true reflects how these riders are typically structured: they must offer a lump-sum option so the insured can convert part of the death benefit into cash immediately. This lump-sum option is the form most people expect when they access accelerated benefits, providing quick liquidity for pressing needs.

Some plans also offer other payout methods, like installments, but those do not negate the requirement or common practice of including a lump-sum option. Group policies can include accelerated benefits, and they aren’t restricted to a separate rider in every case. The main point remains: the lump-sum option is a standard, expected feature of accelerated benefits.