Indiana State Life and Health Insurance Practice Exam

What type of insurance allows benefits to be accessed prior to death due to terminal illness?

1. Whole Life Insurance

2. Term Life Insurance

3. Accelerated Benefits Rider

4. Universal Life Insurance

The correct answer is: Accelerated Benefits Rider

The correct answer, which pertains to the ability to access insurance benefits before death due to a terminal illness, is the Accelerated Benefits Rider. This is a provision that can be added to various life insurance policies, such as term or whole life insurance, allowing policyholders to access a portion of their death benefit while still alive if they are diagnosed with a terminal illness. The funds can be used for medical expenses or other costs associated with end-of-life care, providing significant financial support during a challenging time. This rider specifically addresses urgent needs for funds arising from terminal conditions. Whole life and universal life insurance can provide death benefits, but they do not inherently include early access to benefits for terminal illnesses unless they have this specific rider attached. Term life insurance, while it also provides a death benefit, typically does not offer any living benefits or early access features unless paired with a similar rider. Thus, the Accelerated Benefits Rider stands out as the option that explicitly allows for such access, emphasizing the flexibility and supportive nature of modern insurance products designed to accommodate critical health situations.