What is the term for benefits that allow an insured to receive part of their death benefit before they die due to a terminal illness?

The correct term for benefits that enable an insured individual to access a portion of their death benefit prior to passing away due to a terminal illness is known as accelerated death benefits. This feature is designed to provide financial support to those diagnosed with a terminal illness, allowing them to use the funds to cover medical expenses, living costs, or any other needs during their remaining time.

The mechanism of accelerated death benefits serves an essential function in transforming a life insurance policy into a financial resource during critical moments, thus ensuring that the insured can focus on their health and family instead of financial burdens.

Other terms listed may refer to different aspects of insurance or financial planning but do not signify the same context. Guaranteed issue benefits pertain to policies that are issued without medical underwriting, while lump sum benefits describe a payment made in one complete amount rather than in installments. Terminal benefits does not specifically denote this provision in life insurance terminology. Therefore, accelerated death benefits accurately captures the essence of the question regarding early access to death benefit funds.