Which of the following statements regarding the accidental death benefit ADB rider to a life insurance policy is correct?

1 Top selling term life insurance plan bought by customers through the website with our Zero-Paper-Process. (Source: Company Buy Online data - Dec 2015 till Mar 2020)

2 The critical illness benefit is an accelerated benefit & the death benefit will be reduced by the critical illness cover paid to the policyholder. To know more about the illnesses covered, please refer to the sales brochure.

3 Available only under Life Plus and All in One option. The maximum amount that can be availed is ₹ 2 Crore and will be paid as a lump sum.

4 For Terminal illness, the policy will terminate on payment of this benefit.

5 Tax benefit of ₹ 54,600/- ( ₹ 46,800/- under Section 80C and ₹ 7,800/- under Section 80D) is calculated at the highest tax slab rate of 31.2% (including Cess excluding surcharge) on life insurance premium under Section 80C of ₹ 1,50,000/- and health premium under Section 80D of ₹ 25,000/-. Tax benefits under the policy are subject to conditions under Sections 80C, 80D, 80CCC, 10(10A), (10D) and other provisions of the Income Tax Act, 1961. Goods and Services Tax and Cesses, if any, will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on the above.

6 Tax benefits are subject to conditions under Sections 80C, 10(10D), 115BAC and other provisions of the Income Tax Act, 1961. Goods and Services Tax and Cesses, if any, will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on the above. Tax benefit of ₹ 54,600/- ( ₹ 46,800/- under Section 80C and ₹ 7,800/- under Section 80D) is calculated at the highest tax slab rate of 31.2% (including Cess excluding surcharge) on life insurance premium under Section 80C of ₹ 1,50,000/- and health premium under Section 80D of ₹ 25,000/-.

7 Accelerated Critical Illness Benefit (ACI Benefit) is optional and available under Life & Health and All in One option. This benefit is payable, on the first occurrence of any of the 34 illnesses covered. Medical documents confirming the diagnosis of critical illness need to be submitted. The benefit is payable only on the fulfilment of the definition of the diagnosed critical illness. The ACI Benefit is accelerated and not an additional benefit, which means the policy will continue with the Death Benefit reduced by the extent of the ACI Benefit paid. The future premiums payable under the policy will reduce proportionately. If ACI Benefit paid is equal to the Death Benefit, the policy will terminate on payment of the ACI Benefit. To know more in detail about the ACI Benefit and terms & conditions governing it, kindly refer to the sales brochure. ACI Benefit term would be equal to policy term or 30 years or (75-Age at entry), whichever is lower.

8 Accidental Death benefit (ADB) is up to ₹ 2 crore (subjected to underwriting guidelines). ADB is available in Life Plus and All in One option. In case of death due to an accident, Accidental Death Benefit will be paid out in addition to Death Benefit. Accidental Death Benefit will be equal to the policy term or (80-Age at entry), whichever is lower.

9 On diagnosis of Permanent Disability (PD) due to an accident, the future premiums under your policy for all benefits are waived. To know more about the definitions and terms & conditions applicable for permanent disability due to accident, kindly refer to the sales brochure of ICICI Pru iProtect Smart.

* The given premium is applicable for an 18-year-old healthy male life with the monthly mode of payment and premiums paid regularly for the policy term of 18 years with income payout option with Life Cover of ₹ 1 crore. Goods and Services Tax and/or applicable cesses (if any) as per applicable rates will be charged extra.

# Influence of Age on the Association between Lifestyle Factors and Risk of Hypertension - https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3721664/

ICICI Pru iProtect Smart UIN: 105N151V06. W/II/3821/2021-22 .

What Are Accelerated Death Benefits?

An accelerated death benefit (ADB) is a benefit that can be attached to a life insurance policy that enables the policyholder to receive cash advances against the death benefit in the case of being diagnosed with a terminal illness.

Many individuals who choose an accelerated death benefit have less than one year to live and use the money for treatments and other costs needed to stay alive.

Key Takeaways

• Accelerated death benefits (ADB) allow someone with a life insurance policy who is terminally ill to access a portion of the policy's death benefit while they are alive.
• Accelerated death benefits are typically not taxed as income.
• In order to qualify for an accelerated death benefit, a policy owner needs to provide proof that they are chronically or terminally ill.
• Taking accelerated death benefits will reduce the amount of money received by beneficiaries.
• It may be possible to borrow money from a life insurance policy rather than receive benefits in a lump sum.

How Accelerated Death Benefits Work

Choosing an insurance policy with an accelerated death benefit (ADB) allows the policyholder to pay for their daily living to make it as comfortable as possible while allowing the holder to look after their family once they pass away. This type of benefit was originally started in the late 1980s to alleviate the financial pressures of those diagnosed with AIDS.

The accelerated death benefit provision in a life insurance policy is also known as a "living benefit" rider or "terminal illness benefit."

Some policies might make an accelerated death benefit available even if it's not mentioned in the contract. You qualify for accelerated death benefits if you contract a terminal illness and are expected to die within two years. You also qualify if you've been diagnosed with an illness that will reduce your expected lifespan, need an organ transplant because of illness, or be in long-term hospice care. Accelerated death benefits are also possible if you need assistance with everyday activities like bathing or using the toilet.

The cost of a living benefit can vary according to the insurance company and policy. If the coverage is already included, the cost will be included in the policy. If not, you will have to pay a fee or a percentage of the death benefit.

Receiving an accelerated death benefit can affect your eligibility for Medicaid and SSI.

Example of Accelerated Death Benefits

Consider a 40-year-old named Fred, a preferred non-tobacco user with a $1 million life insurance policy. Fred contracted terminal brain cancer and decided he wanted to accelerate half the face value of his policy and collect an accelerated death benefit.

After reviewing the claim, the insurance company made a lump-sum offer of $265,000. Fred accepted the offer and received a $265,000 payment. His death benefit was decreased by the amount he accelerated ($500,000). After cashing the check, Fred's remaining death benefit was $500,000, and he paid new premiums based on a $500,000 face value instead of the original $1 million face value.

Special Considerations

Accelerated death benefits are usually tax-exempt for individuals expected to die within two years. This type of benefit isn’t meant to substitute for long-term care insurance coverage. It should be used to supplement expenses not covered by a long-term care policy. Accelerated death benefits are also different from chronic care or long-term care rider.

What Is the Purpose for an Accelerated Death Benefit?

Accelerated death benefits exist to help terminally ill individuals with life insurance access a portion of their death benefit before they pass away. The intent is to use the money to help cover healthcare and related costs. In return, the amount of the total death benefit is reduced.

What Is an Accelerated Death Benefit Rider?

A rider is an additional coverage or benefit attached to an insurance policy. Accelerated death benefits may be added as an ADB rider, which allows the insured to access some of the cash value of their death benefit if they are terminally ill.

What Do ADB Riders Cost on a Life Insurance Policy?

With many insurers, an ADB rider will be included in a life insurance policy and come at no additional cost.

Which of the following statements correctly describes the accidental death benefit rider on a life insurance policy?

What is an accidental death benefit rider?

What is ADB rider in insurance?

What is considered accidental death for insurance?