An Accelerated Death Benefit (ADB) is a benefit that can be added to your life
insurance policy. It can provide cash advances against your death benefit while you
are still alive. You can use this benefit if you have a terminal illness, need
nursing home care permanently, or can't perform activities of daily living for
yourself. Some examples of activities of daily living include eating, bathing,
dressing, and using the bathroom. There might be spending limits (caps) on ADB policies.
You may want to check this out before getting an ADB policy.
Listed below are the opportunities and requirements/limits for ADB:
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From one insurance policy, you can benefit in two ways:
1. Paying for your long-term care needs.
2. Leaving a death benefit to your heirs (family or friends).
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These policies can only be used if you have a terminal illness, need nursing home care permanently, or can't perform activities of daily living. There may be limitations on these polices.
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If you get an ADB at the time when you buy a life insurance policy, it may help you later because you might not qualify for a long-term care policy at an older age.
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You must continue to own your policy and pay the premiums.
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You can add an ADB benefit to a life insurance policy for little or no additional cost.
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The face value of your life insurance policy might not be large enough. In this case, the ADB payment won't be enough to pay for your long-term care needs.
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Compared to long-term care insurance, the monthly benefit from an ADB policy might be lower and the coverage period is usually shorter.
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These policies usually don't offer an inflation (future price increases) protection.
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If you need a lot of health care and use the ADB, there may be little or no death benefit for your heirs (family or friends).
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You might not be eligible for Medicaid.
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You might not have enough coverage if you need long-term care for an extended period of time.
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Page Last Updated: July 2, 2007
Source: http://www.medicare.gov/LongTermCare/Static/AccDeathBenefits.asp
