What is ‘Accelerated Option’
This term refers to an option in an insurance contract, usually in the form of a rider, that allows for accelerated benefits or partial benefits sooner than they would otherwise be payable. Alternatively, in life insurance contracts, an accelerated option can refer to the option that allows the policy holder to apply the accumulated cash value to pay off the policy.
Explaining ‘Accelerated Option’
One form of an accelerated option is the accelerated death benefit rider in a whole life insurance policy. The terms and conditions of receiving the benefits are outlined in advance, and almost always include a provision for benefits if the policyholder becomes terminally ill. Another form is the option to use the cash value of the policy to prepay the remaining balance of premiums due in a lump sum payment.
Further Reading
- The accelerated binomial option pricing model – www.jstor.org [PDF]
- Managerial short-termism and investment: Evidence from accelerated option vesting – academic.oup.com [PDF]
- Accelerated simulation for pricing Asian options – ieeexplore.ieee.org [PDF]
- Not all buybacks are created equal: The case of accelerated stock repurchases – www.tandfonline.com [PDF]
- Underwriting 1.5 C: competitive approaches to financing accelerated climate change mitigation – www.tandfonline.com [PDF]
- Do efficient banking sectors accelerate economic growth in transition countries – papers.ssrn.com [PDF]
- A new economic instrument for financing accelerated landfill aftercare – www.sciencedirect.com [PDF]
- Accelerated share repurchases – www.sciencedirect.com [PDF]
- The retention effects of unvested equity: Evidence from accelerated option vesting – academic.oup.com [PDF]
