New York Insurance Exam Practice Question
What is the purpose of a life insurance policy's accelerated death benefit?
Correct Answer: B
Rationale: The accelerated death benefit allows policyholders facing terminal illness to access a portion of their death benefit while still alive, providing crucial financial support during a difficult time.
Option A is incorrect; the purpose is not to increase premiums, but rather to offer financial relief. Option C misrepresents the benefit, as it does not waive premium payments but allows early access to funds. Option D is also wrong; the accelerated death benefit does not cancel the policy but provides an option for accessing funds without termination. Thus, B accurately reflects the primary function of this benefit.
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