A life insurance policy provision that allows for a reduced death benefit is referred to as the?

The provision in a life insurance policy that allows for a reduced death benefit is known as the accelerated (living) benefit. This provision enables policyholders to access a portion of their death benefit while they are still alive, typically in cases of terminal illness or significant medical conditions. This can be particularly beneficial for individuals who require funds to cover medical expenses or other costs associated with their condition. By taking advantage of this provision, the policyholder can alleviate financial burdens during a difficult time, although it will result in a reduced amount available for beneficiaries upon the insured's death.

The other options do not accurately describe this provision. The cash value benefit relates to permanent life insurance policies that accumulate cash value over time and can be borrowed against but does not refer to accessing death benefits. A survivor benefit generally relates to benefits provided to a spouse or family member after the insured's death, not to living benefits accessed by the insured. Beneficiary adjustment refers to changes made to the designated beneficiaries rather than accessing benefits while living. Thus, the accelerated (living) benefit distinctly identifies the ability to receive part of the death benefit early, making it the correct choice.