Acceleration Life Insurance

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DEFINITION of 'Acceleration Life Insurance'

A type of policy that pays a portion (typically 25\% or 50\%) of the death benefits (the face amount of the policy, less any outstanding loans or fees) in case of a specified illness or medical emergency.

BREAKING DOWN 'Acceleration Life Insurance'

The accelerated death benefit provides funds necessary to pay for medical costs, to extend the life of the insured. Insurance companies pay the specified percentage of the death benefit in a lump sum.

Upon death, the remainder of the insured's death benefit is paid to the beneficiary, just as under a traditional life insurance policy.

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RELATED FAQS
  1. How can I borrow money from my life insurance policy?

  2. 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 >>
  3. Do beneficiaries pay taxes on life insurance?

  4. Why is accidental life insurance so inexpensive?

    Accidental life insurance is an inexpensive way of obtaining life insurance coverage for yourself or someone else in your ... Read Answer >>
  5. Can policy benefits be paid out in 10, 20, and 30 year increments to its beneficiaries? ...

    I would like to know if I buy a $200k policy, and name my sons and/ or grandchildren as beneficiaries, can I specify ... Read Answer >>
  6. Do I have to pay taxes on a death benefit?

    I still work. I also receive SSI due to my wife's passing.  ... Read Answer >>
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