What Is Chronic Illness Rider? Definition

Why it matters

The rider helps pay for care costs without a separate long-term care policy. Benefits reduce the death benefit, and the insurer may charge a fee at the time of the claim or a cost in the premium. Qualifying rules usually follow federal tax definitions, such as being unable to perform two of six activities of daily living. Terms, waiting periods, and payout limits vary by carrier and state. It is not the same as a full long-term care policy.

Source: irs.gov

Related terms

Accelerated Death Benefit Rider: An accelerated death benefit rider lets the insured receive part of the death benefit while alive if diagnosed with a qualifying condition, such as a terminal illness. It is also called a living benefit.
Long-Term Care Rider: A long-term care rider is an add-on that lets the owner use part of a life insurance death benefit or an annuity's value to pay for long-term care expenses if specific conditions are met.
Terminal Illness Rider: A terminal illness rider is an add-on that lets the insured receive part of the death benefit early after a physician certifies an illness likely to cause death within a set time, often 12 or 24 months.
Rider: A rider is an optional add-on to an insurance policy or annuity that changes or adds benefits for an extra cost. It becomes part of the contract once attached.
Critical Illness Rider: A critical illness rider pays part of the death benefit early if the insured is diagnosed with a covered condition, such as a heart attack, stroke, or cancer. The list of conditions is set in the rider.

All 241 terms

Why it matters

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