Life insurance is usually a product that you don’t get for yourself, but for those around you to continue the life you’ve provided if something was to happen to you. However, that doesn’t mean that life insurance can’t offer living benefits. Most life insurance policies have add on’s known as riders which allow you to customize your policy. Some of which offer an add on called the Critical Illness Rider. Let’s discuss what is, why get it, who it’s for and more!
Before we get into detail, let’s highlight some of the major points of the this rider:
- You will get a portion of the death benefit in the case of a critical illness.
- You can use the money on things other than illness treatment.
- You don’t have to use the funds if you’re ill.
- The money you do use, will come out of the total coverage amount.
- Some of the critical illnesses include:
- Cancer
- Coma
- Heart Attack
- Stroke
- Bypass
- Severe Burns
- Kidney Failure
- Paralysis
- Loss of sight, speech, or hearing
- Transplant
- Loss of independent living
Those are some of the conditions listed on the product descriptions, you can expect them to vary slightly from one company’s product to another. Make sure to double check with your agent for the situations covered under the product offering.
That’s the short of what you can expect of the critical illness rider. If you would like to receive a quote for life insurance with critical illness rider included, feel free to contact us. Otherwise, let’s dive into detail.
How it Works
The Critical Illness Rider is an add on that comes with your life insurance policy, usually at extra cost. It allows you to use a portion of your coverage amount in the event of a critical illness listed in the policy details. For example, let’s say you have a heart attack, the life insurance company will “accelerate” a portion of your death benefit for you to use as you please. This can help with covering medical costs that health insurance didn’t cover or even for things around the house.
The amount given to you will usually depend on the illness. The product description will outline the details, but you can expect anywhere from 25% to 100% of your death benefit (coverage amount) to be accelerated to you. However, that is not to say that you have to pull the money out of the total coverage amount. The choice whether to use the money or not will be completely up to you. Keep in mind that if you do choose to get the funds, it will be subtracted out of the total your beneficiaries receive when you die. So if you have a $500,000 policy, and 50% of it is given to you due to a critical illness, then your beneficiaries will only receive $250,000 when you pass.
Who it’s for
The critical illness is especially good for anyone who has a history of illness in their family. If those illnesses are hereditary, then you want to protect against the chance that you might get it. Having that living benefit with your life insurance policy can be a huge relief in the case of an illness. Another good reason to have this rider is if there are high deductibles, exclusions, or gaps in your health insurance coverage. This can help take care of those costs and provide some extra relief in your personal life during such a chaotic time. The funds can also be used for things like home care while you are getting treatment.
Terminal Illness Rider vs Critical Illness Rider
These two riders are often confused, but they are not the same thing. The Terminal Illness Rider, often called Accelerated Death Benefit Rider, is an add on that provides the same accelerated death benefit privilege, but only for a terminal illness. So to qualify for this payout you would have to be diagnosed as having less than 24 months to live. While some of the critical illnesses may be considered terminal (like cancer) it doesn’t mean they have to be for you to get the payout. The terminal illness rider usually comes with a policy at no extra cost.
How to get it
If you want to add a critical illness rider to your policy, you will most likely be looking at an additional charge on top of your premium. You can compare quotes on our quoter and contact us for a critical illness quote on top of that policy. As an independent agency, we will have the ability to shop around with all the A-rated life insurance companies to get you the best policy at the best rate, at no extra cost to you!
If you have any questions, give us a call at 888-492-1967 or hit the chat button below! Welcome to InsureChance!
