Benefits available in some life insurance policies prior to death.
Life insurance policies with a special feature that allows payment of the death benefit when the insured person is still alive. Such payment is usually limited to situations in which the policy holder is terminally ill.
a life insurance policy where policy proceeds are paid before to death if the insured is terminally ill. The insured has the option of getting his or her death benefit while still alive, and presumably during a time of need, instead of having the money paid out only after death to a beneficiary or the estate. Principal Mut. Life Ins. Co. v. United States, 26 Cl. Ct. 616 (1992)
Pre-death benefits paid by an insurance carrier
If your policy has an accelerated death benefits provision, it will pay you - under certain conditions - all or part of the policy death benefits while you are still alive. These conditions include proof that the policyholder is terminally ill with a life expectancy of less than 12 months, has a specified life-threatening disease or is in a long-term care facility such as a nursing home. If you have a group term life policy or certificate, the amount of accelerated benefit you may receive is limited by law to: the greatest of $25,000 or 50% of the death benefit. By accepting an accelerated benefit payment, a person could be ruled ineligible for Medicaid or other government benefits. The proceeds also may be taxable.
A life insurance policy option that provides policy proceeds to insured individuals over their lifetimes, in the event of a terminal illness. This is in lieu of a traditional policy that pays beneficiaries after the insured's death. Such benefits kick in if the insured becomes terminally ill, needs extreme medical intervention, or must reside in a nursing home. The payments made while the insured is living are deducted from any death benefits paid to beneficiaries.
The process of providing part or all of the death benefits to be paid to the policy owner if the insured contracts a terminal illness.
