Explain "graded death benefit".

A graded death benefit refers to a life insurance policy structure where the death benefit is not immediately at its full value but instead increases over time. This type of policy is designed to provide coverage for individuals who may have health issues that make it difficult for them to secure standard life insurance.

In the early years of a graded death benefit policy, if the insured passes away, the beneficiary receives a lower death benefit amount. However, as time goes on, that amount gradually increases until it reaches the full face value of the policy. This gradual increase can last for a specified period, such as a few years, after which the full death benefit is available regardless of when the policyholder dies.

This type of benefit structure makes the policy appealing for those looking for insurance options despite health concerns, allowing them to receive some level of financial protection for their beneficiaries, even if it starts lower and builds up over time. The option structured around fixed benefits or immediate full benefits does not align with the principles of a graded death benefit, making them less relevant in this context.