What type of life insurance pays a death benefit if the insured becomes terminally ill?

Accelerated death benefit life insurance is specifically designed to provide a death benefit payout to the policyholder if they are diagnosed with a terminal illness. This feature allows individuals to access a portion of their death benefit while they are still alive, which can be beneficial for covering medical expenses, hospice care, or other financial needs that may arise due to a terminal diagnosis.

This type of policy addresses the unique circumstances that come with terminal illnesses and provides financial support during an incredibly challenging time. By allowing the insured to receive some or all of the death benefit early, it alleviates financial stress and provides peace of mind when it is needed most.

The other types of life insurance mentioned—universal life, term life, and whole life—do not inherently include this feature as part of their standard benefits. While some of these policies may have riders that could add similar benefits, they are not primarily designated for terminal illness payouts. Thus, accelerated death benefit life insurance stands out in its purpose and utility for those facing terminal health challenges.