What does an accelerated death benefit allow policyholders to do?

An accelerated death benefit enables policyholders to access a portion of their death benefit early if they are diagnosed with a terminal illness. This provision is particularly significant as it allows individuals facing a dire medical situation to utilize the funds for various purposes, such as paying for medical expenses, managing end-of-life care, or making necessary financial arrangements. By receiving this benefit early, policyholders can ease the financial burden on themselves and their loved ones during a challenging time.

The other options do not accurately reflect the purpose of an accelerated death benefit. Receiving full benefits at retirement age pertains to different types of insurance policies and retirement planning, while converting term life insurance to whole life insurance involves policy changes rather than early payout benefits. Cashing out a policy at any time does not typically apply, as accelerated death benefits are specifically tied to terminal illness and not general access to policy funds.