DEFINITION of 'Accelerated Option'

This term refers to an option in an insurance contract, usually in the form of a rider, that allows for accelerated benefits or partial benefits sooner than they would otherwise be payable. Alternatively, in life insurance contracts, an accelerated option can refer to the option that allows the policy holder to apply the accumulated cash value to pay off the policy.

BREAKING DOWN 'Accelerated Option'

One form of an accelerated option is the accelerated death benefit rider in a whole life insurance policy. The terms and conditions of receiving the benefits are outlined in advance, and almost always include a provision for benefits if the policyholder becomes terminally ill. Another form is the option to use the cash value of the policy to prepay the remaining balance of premiums due in a lump sum payment.

RELATED TERMS
  1. Living and Death Benefit Riders

    Living and death benefit riders are a descriptive class of contractual ...
  2. Accelerated Benefits

    A clause in certain life insurance policies that enables the ...
  3. Rider

    A provision of an insurance policy that is purchased separately ...
  4. Accelerated Death Benefit - ADB

    A benefit that can be attached to a life insurance policy that ...
  5. Add To Cash Value Option

    A common benefit option on life insurance policies wherein the ...
  6. Term Life Insurance

    A policy with a set duration limit on the coverage period instead ...
Related Articles
  1. Financial Advisor

    How Accelerated Benefit Riders Fill Insurance Gaps

    Accelerated benefit riders have become the new darlings in the financial marketplace. Here's why.
  2. Insurance

    How Long-Term Care Riders on Life Insurance Work

    What is the difference between Accelerated Death Benefit for Chronic Illness and Long-Term Care Riders offered on life insurance policies?
  3. Insurance

    Let Life Insurance Riders Drive Your Coverage

    Find out how these additional benefits can help you customize your policy.
  4. Financial Advisor

    Living And Death Benefit Riders: How Do They Work?

    Find out how these different riders work, and which type is right for you.
  5. Financial Advisor

    Should You Buy A Life Insurance Disability Rider?

    Does it make sense to pay an additional cost for a waiver of premium rider on a life insurance policy?
  6. Financial Advisor

    Getting Life Insurance in Your 20s Pays Off

    Find out how Americans in their 20s can benefit from a well-thought-out life insurance policy, especially if they are able to build cash value for retirement.
  7. Retirement

    Understanding Different Types of Life Insurance

    Understand the various types of life insurance, how each can be used in personal or business financial planning, and for whom they are best-suited.
  8. Retirement

    How Survivorship Life Insurance Works

    Should you buy a survivorship life insurance policy?
  9. Managing Wealth

    Life Insurance With an Increasing Death Benefit

    Why buy a life insurance policy with an increasing rather than level death benefit
Hot Definitions
  1. Financial Statements

    Records that outline the financial activities of a business, an individual or any other entity. Financial statements are ...
  2. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
  3. Money Market

    A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded. ...
  4. Block (Bitcoin Block)

    Blocks are files where data pertaining to the Bitcoin network is permanently recorded.
  5. Fintech

    Fintech is a portmanteau of financial technology that describes an emerging financial services sector in the 21st century.
  6. Ex-Dividend

    A classification of trading shares when a declared dividend belongs to the seller rather than the buyer. A stock will be ...
Trading Center