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.
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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 2026-06-14
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