Tennessee Life Producer Practice Exam

What must an individual have to qualify for accelerated death benefits?

1. A substantial cash reserve

2. A terminal illness

3. A long history of insurance payments

4. A medical examination

The correct answer is: A terminal illness

To qualify for accelerated death benefits, an individual must have a terminal illness. This benefit allows policyholders with a life insurance policy to access a portion of their death benefit while they are still alive, primarily to help cover medical expenses and other costs associated with their condition. Accelerated death benefits are designed specifically for circumstances where the insured is diagnosed with a terminal illness, which typically is defined as a medical condition that is expected to lead to death within a specified period, often 12 months. This feature provides financial support at a critical time and is a valuable component for many life insurance policies. Other considerations, such as cash reserves, a history of insurance payments, or the need for a medical examination, do not typically determine eligibility for these benefits. The focus is primarily on the individual's health status—specifically, the presence of a terminal illness. This illustrates how life insurance products can adapt to meet the needs of policyholders facing serious health challenges.