One of my client's recently obtained guardianship of her aged mother. Her mother was recently moved to a nursing home due to health problems. She is not expected to live longer than a year. My client approached me about getting help paying for the cost of the nursing home and otherwise caring for her mother. We went through her mother's finances and discovered that she took out a life insurance policy that contained an Accelerated Death Benefit clause. An Accelerated Death Benefit clause allows the insured to collect part of her death benefits before she dies if certain circumstances exist.
Accelerated Death Benefit
An Accelerated Death Benefit clause in a life insurance policy allows the insured to received a percentage of the policy’s face amount, discounted for interest, prior to the insured's death. As in the case of my client's mother, the benefits kick in when the insured becomes terminally ill, needs extreme medical intervention, or must reside in a nursing home. The payments made while the insured is living are deducted from any death benefits paid to beneficiaries.
Use of the Accelerated Death Benefit has allowed my client to give her mother the kind of care she needs without draining her bank account and having to sell off sentimental property.