Terminal Illness Benefit

What Does Terminal Illness Benefit Mean?

A terminal illness benefit is an additional feature included in some life insurance policies. It allows the insured, upon being diagnosed with a terminal illness and having a life expectancy of less than one year, to access the death benefit payment while still alive. This contrasts with most life insurance policies, where the death benefit is only paid out after the insured’s death.

It is important to note that this term is commonly used outside the United States. In the U.S., this benefit is typically referred to as the accelerated death benefit.

Insuranceopedia Explains Terminal Illness Benefit

This benefit provides a valuable way for individuals with a terminal illness to cover medical bills and final expenses while they are still alive.

Insurance companies often include the terminal illness benefit at no extra cost. Since the insurer would likely pay the death benefit within a year regardless, they allow the insured to access the payment early without additional charges.