Accelerated Option

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. Rider

    A provision of an insurance policy that is purchased separately ...
  2. Living and Death Benefit Riders

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

    A clause in certain life insurance policies that enables the ...
  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. Accumulation Option

    A policy feature of permanent life insurance that allows policyholders ...
Related Articles
  1. Personal Finance

    A Closer Look At Accelerated Benefit Riders

    Accelerated benefit riders can allow policy holders to access the death benefit in their life insurance policy while they are still living if they meet certain conditions. Knowing what you get ...
  2. Personal Finance

    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. Trading

    Let Life Insurance Riders Drive Your Coverage

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

    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?
  5. Personal Finance

    Living And Death Benefit Riders: How Do They Work?

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

    Cash Value vs Term Life Insurance: Which is Best?

    The debate between cash value life insurance and term insurance plus an investment plan is an ongoing one. Here's a look at both sides of the argument.
  7. Personal Finance

    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.
  8. Managing Wealth

    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
  10. Personal Finance

    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.
RELATED FAQS
  1. What is the difference between the death benefit and cash value of an insurance policy?

    Understand the difference between the various components of a life insurance policy including the death benefit and a policy's ... Read Answer >>
  2. How do I determine the face value of a life insurance policy?

    Read about how to determined the face value for any life insurance policy, and see what circumstances can trigger a change ... Read Answer >>
  3. What is term insurance?

    Term insurance is a type of life insurance policy that provides coverage for a certain period of time, or a specified "term" ... Read Answer >>
  4. Why would you want a monthly benefit versus a daily benefit?

    An insurance benefit is the amount of money paid to or on behalf of the policyholder. Depending on what kind of insurance ... Read Answer >>
  5. What is the difference between term and universal life insurance?

    Term life insurance is the most basic of insurance policies. It is nothing more than an insurance policy that provides protection ... Read Answer >>
  6. Is short selling a form of insurance?

    Explore short selling and put options. Learn how put options may be used as insurance to protect positions, and costs associated ... Read Answer >>
Hot Definitions
  1. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  2. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  3. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  4. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  5. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  6. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
Trading Center