Accelerated Death Benefit

Definition


Accelerated Death Benefit (ADB): In Canadian life-insurance policies, an optional clause that lets a policy-holder, while still living, access a portion of the tax-free death benefit when diagnosed with a terminal illness or other life-shortening condition covered by the contract. The advance—typically 25–75% of the total death benefit—is paid quickly and without underwriting review, reducing the amount payable to beneficiaries upon the insured’s death by the same amount, plus any interest or administrative charge stated in the policy. Funds can be used for any purpose, such as replacing lost income, paying for medical care, or covering family expenses.

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