What benefit is often payable to a life insurance policyholder diagnosed with a terminal illness?

The benefit that is typically payable to a life insurance policyholder diagnosed with a terminal illness is the accelerated (living) benefit. This option allows individuals who have been diagnosed with a terminal condition to receive a portion of their death benefit while they are still alive. This can provide them with much-needed funds to cover medical expenses, make necessary adjustments to their living situation, or fulfill personal wishes during their remaining time.

Accelerated benefits serve a fundamental purpose; they offer financial assistance during an extremely challenging time, allowing policyholders to utilize their life insurance policy for immediate needs rather than waiting until death, when the full benefit is typically paid out to beneficiaries. This aspect highlights the flexibility of life insurance policies in supporting policyholders beyond death, allowing them to manage their health care and personal affairs proactively.

Other benefits listed, such as death benefits, long-term care benefits, and disability income benefits, serve different needs that are not specifically tied to the circumstances of a terminal illness diagnosis. While they are significant in their own contexts, they do not provide the immediate financial assistance that is characteristic of accelerated benefits for living policyholders facing terminal illness.