What do accelerated benefits mean in health care?

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Accelerated benefits are benefits that certain life insurance companies offer as policies, ones that allow policyholders to receive the amount agreed upon on the plan before their death. Usually, such benefits are only released to the policyholder after maturity, or to the family of the holder after their passing.

Another term used for accelerated benefits is living benefits or accelerated death benefits because the main reason why such a policy is activated is when the policyholder succumbs to a serious injury, chronic sickness, or terminal illness that require extensive and often long-term care.

Beneficiaries are entitled to this when doctors have determined via diagnosis that the life expectancy of the policyholder is nine months or less. Of course, only the policyholder can apply for an accelerated benefit. Typically, only 50 percent of the insurance coverage can be released when the insured avails of their accelerated benefit, which can be used for home renovation, a trip abroad, paying extra medical care, etc.

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Even when the actual accelerated death benefit is applied for, the policyholder must continue to pay a yet-to-mature policy while already receiving the benefits. However, there’s no need to repay the benefits, as the loans are, in such scenarios, just taken from the face value of policy when it matures. It is highly advisable for those interested in availing of accelerated benefit to ask their insurance if this option is part of their policy to begin with, as it’s a relatively recent industry addition.

State Mutual Insurance is a legal reserve mutual insurer providing Medicare subscribers supplementary health insurance coverage. The company sees itself as a national insurer with a commitment to community service and the health security of American citizens. Follow this Twitter page for related posts and insights on the insurance industry.