What Is Critical Illness Rider? Definition

Why it matters

The benefit gives cash during a health crisis for bills or treatment. Payments reduce the death benefit, and the rider may include a waiting period and exclusions. Only the diagnoses listed in the contract qualify, and each carrier defines them differently. Some riders cost extra and others come with the policy. Compare the covered conditions and the definitions before relying on it. It does not replace health insurance.

Source: naic.org

Where we use this term

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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.
Chronic Illness Rider: A chronic illness rider is an add-on that lets the insured access part of the death benefit early if a licensed health care practitioner certifies a chronic illness, usually the inability to perform daily living activities.
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.
Death Benefit: A death benefit is the money a life insurance carrier pays to the beneficiary when the insured dies. It is usually paid as a lump sum and is generally income tax free to the beneficiary.

All 241 terms

Why it matters

Where we use this term

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