Life Insurance

Accelerated Death Benefit Rider

An accelerated death benefit (ADB) rider allows a policyholder diagnosed with a terminal illness—typically defined as a life expectancy of 12–24 months—to receive a portion of their life insurance death benefit in advance, income-tax-free under most circumstances.

Last reviewed: May 2026 · Editorial methodology

Definition

The accelerated death benefit rider, now included in most life insurance policies as a standard no-cost feature, permits a terminally ill insured to receive up to 50–100% of the policy's death benefit as a living benefit, with the death benefit to beneficiaries reduced by the amount accelerated plus an interest charge. The IRS generally treats ADB payments as income-tax-free under IRC Section 101(g) when the insured is certified by a physician as having a life expectancy of 24 months or less. A policyholder with a $1,000,000 policy who accelerates $400,000 for end-of-life medical care would leave $600,000 (minus any interest charges) for beneficiaries. Some riders also provide acceleration for chronic illness, long-term care needs, or critical illness diagnoses—these are distinct benefit triggers with different rules and potential tax treatment. The ADB is separate from long-term care riders, which provide periodic monthly benefits rather than a lump sum. Policyholders receiving Medicaid may find that ADB payments affect their eligibility; accelerated benefits are considered a countable resource in Medicaid calculations in most states.

Where this term matters

Life Insurance →Long-Term Care →Medicare →

Tip

Glossary definitions are educational. Always check your own policy language — insurers can define common terms differently from one another. When in doubt, request a written explanation from your agent.

Related terms

Terminal Illness RiderA terminal illness rider allows a policyholder diagnosed with a terminal illness—typically a life expectancy of 12–24 months—to access up to 50–100% of the policy death benefit as a living benefit, providing funds for final medical care, hospice, or personal wishes.Chronic Illness RiderA chronic illness rider allows a policyholder to access the life insurance death benefit on an accelerated basis—typically monthly installments—if they become permanently unable to perform two of six activities of daily living or require substantial supervision due to cognitive impairment.Long-Term Care RiderA long-term care rider attached to a permanent life insurance policy allows the insured to receive monthly payments from the policy's death benefit to cover qualified long-term care expenses such as nursing home or home health aide costs, blending life insurance with LTC protection.Critical Illness RiderA critical illness rider accelerates or adds a lump-sum payment to a life insurance policy upon first diagnosis of a covered critical illness—commonly cancer, heart attack, or stroke—giving the insured cash to use for any purpose including medical bills, lost income, or home modifications.BeneficiaryThe person, entity, or trust designated to receive the death benefit of a life insurance policy.

Related guides

Source: Cover Forge USA editorial team|Last verified: May 2026|Methodology
Definitions are educational and may be simplified. Always refer to your policy contract and consult a licensed agent for terms that affect coverage decisions.
CF

Cover Forge USA Editorial Team

Editorial Lead

This article was researched and written by the Cover Forge USA editorial team against federal sources (NAIC, CMS, FEMA, DOL, SSA, state DOIs) and standard policy forms. Bylines organize content by topic — they do not assert individual licensure. See our editorial-policy for details.

Reviewed June 2026

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