Understanding the Lien Approach

When comparing accelerated death benefit amounts available on life insurance policies, it’s important to understand that there are two primary methods of calculating the amount that can be accelerated: the “lien approach” and the “discount approach.” The lien approach offers several benefits that are important to clients. Should your clients choose a policy and rider that provides a guaranteed accelerated benefit amount and a death benefit for their beneficiaries? Or would they prefer an unpredictable amount (even if the top of the range is higher) and no benefit for their loved ones? For many clients, a guaranteed acceleration amount and death benefit using the accelerated death benefit rider is the clear choice.