Accelerated Option

What Does Accelerated Option Mean?

An accelerated option is a provision that can be included in a life insurance contract, allowing the policyholder to receive partial benefits before their death. In other words, it “accelerates” the benefit payout to some extent. Additionally, it may refer to the option of using the accumulated cash value of a permanent life insurance policy to pay the remaining premiums.

Insuranceopedia Explains Accelerated Option

A standard life insurance policy only pays out the death benefit upon the policyholder’s death. However, with an accelerated option, the policy may pay out earlier under certain conditions. Typically, for the rider to activate, the policyholder must have a medically incapacitating condition, contract a long-term, high-cost illness, or require permanent nursing home confinement. This option provides the policyholder with the financial means to make their daily life more comfortable until death, while still offering a partial death benefit to their family after they pass. Because the rider only kicks in for serious conditions like a long-term illness or permanent nursing home stay, anyone with a chronic diagnosis or family history of one should look closely at life insurance for chronic illnesses before settling on a policy. Not every insurer handles accelerated options the same way either. Some pay out a much larger share of the death benefit than others, and qualifying conditions can be stricter or more lenient, so it pays to compare how the best life insurance companies structure this rider before you buy.