Illinois Insurance State Practice Exam

What are accelerated benefits in life insurance?

1. Payments made to beneficiaries only

2. Benefits paid only after death

3. Benefits paid before death for terminal illness

4. Loans taken against the policy value

The correct answer is: Benefits paid before death for terminal illness

Accelerated benefits in life insurance refer to the provision that allows policyholders to receive a portion of their death benefits while they are still alive, typically in cases of terminal illness. When an individual is diagnosed with a terminal condition and has a limited life expectancy, this feature enables them to access funds to cover medical expenses or other needs, providing financial relief during a difficult time. This option captures the essence of accelerated benefits, highlighting their purpose and functionality in the context of life insurance. It reflects the understanding that these benefits are designed to support individuals facing severe health challenges, allowing them to utilize their policy in a way that can enhance their quality of life in their remaining days.