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What Is a Critical Illness Rider?

Life Insurance
A medical provider talks with a patient's spouse about critical illness riders.

Being diagnosed with a serious illness can be emotionally and financially challenging. It may be difficult to pay for the myriad costs associated with long-term care and treatment. Preemptively adding a critical illness rider to your life insurance policy could help you handle those potential costs.

Here's a look at some of what you need to know about critical illness riders, including how they work, what they cover, reasons you may want to consider adding one to your policy and some questions to ask yourself as you decide whether this type of rider suits you.

Key Takeaways

  • A critical illness rider can provide you with benefits while you're still alive if you receive a diagnosis for a specific illness.
  • Nearly 800,000 Americans have a stroke each year and nearly 40% of people will receive a cancer diagnosis in their lifetime.
  • A critical illness rider is not the same as critical illness insurance; one is an addendum to a life insurance policy while the other is a type of insurance that helps with costs not covered by regular health insurance.

First Things First: What Is a Life Insurance Rider?

Riders are add-ons to a life insurance policy that enhance your coverage. They provide an additional benefit on top of the death benefit provided by your standard life insurance policy.

Several different riders are available to life insurance policyholders. Some people purchase accidental death riders, which increase the death benefit if the policyholder dies in a qualified accident. Others might get a waiver of premium rider that lets them pause their policy payments in certain financial hardship situations.

A critical illness rider is one type of rider you may want to consider as you evaluate and personalize your own life insurance coverage. A knowledgeable financial professional can walk you through the different riders available to add to a whole or term life insurance policy.

How Does a Critical Illness Rider Work?

Life insurance most often involves benefits that only pay out when the policyholder dies. But a critical illness rider can provide you with benefits while you're still alive if you receive a diagnosis for a specific illness. It lets you access the policy's benefits for assistance covering medical costs, including treatments, medications, hospital stays, outpatient services and other expenses.

When you add a critical illness rider to your life insurance policy, you'll likely have a slightly higher premium. You can add riders to your term or whole life policy when you first sign up for your plan, or in many cases, you can add them later. You become eligible for the critical illness rider benefit only upon a diagnosis from a doctor of a qualifying health issue. Some policies allow you to access up to 80% of your total life insurance benefit while you're alive to help offset the expenses associated with your illness.

The limits vary across policies and insurance providers. You may receive this payment as a lump sum depending on the terms of your plan. The money is yours to use as you see fit, whether that means paying for your own care or supporting your family and covering other bills and costs of daily living.

It's important to note that a critical illness rider is not the same as critical illness insurance. One is an addendum to a life insurance policy while the other is a type of insurance that helps with costs not covered by regular health insurance. If you're not sure which option is right for you, a financial professional can help you determine which better helps address your needs.

MORE What's the Difference Between Critical Illness & Health Insurance?

What Does a Critical Illness Rider Cover?

Your eligibility for benefits from the critical illness rider occurs upon diagnosis of certain conditions. The diagnosis must come from a doctor and be a serious health issue. Some that are commonly included are:

  • Specific types of cancer
  • Heart attack
  • Stroke
  • Major organ transplant
  • Coronary bypass
  • Kidney failure

Your exact life insurance rider may not cover all these. Your policy may have additional stipulations for various conditions. For example, certain forms of cancer may not make you eligible for critical illness coverage if the policy specifies that they must be life-threatening.

MORE How Life Insurance With Living Benefits Could Help Protect Your Future

What Does a Critical Illness Rider Exclude?

Before you add a critical illness rider to your policy, make sure you fully understand what the rider will cover — and what it won't cover. Many riders specify age limits, meaning they won't pay out a benefit once the policyholder reaches a certain age. It's also common practice for critical illness riders to deny coverage for preexisting conditions or illnesses that are the result of certain dangerous activities.2 Also, if you already have a serious illness diagnosis, it may not make sense to purchase a critical illness rider.

If you're more concerned about workplace accidents than unforeseen illnesses, you may want to consider an accidental death rider, which offers an extra benefit for death occurring as the result of a car crash, workplace mishap or other types of sudden events.

Reasons for Purchasing a Critical Illness Rider

A serious illness can create a significant financial burden as you budget for your care and treatment while continuing to juggle the expenses of everyday life. A critical illness rider can help support you and your loved ones by adding an extra cushion to pay for the various costs associated with your diagnosis. At a time when you and your family will be making important decisions about care and treatment, early access to your life insurance benefit could help ease one form of stress during a difficult period.

Some people with high-deductible health insurance plans enhance their life insurance coverage with a critical illness rider if they're concerned about paying for medical bills out of pocket. Meanwhile, others are drawn to the flexibility of a critical illness rider because the benefit can go toward a broader range of costs — not just medical bills but transportation and living expenses, such as housing and utility bills. This can be especially helpful if you aren't able to keep working. A critical illness policy can help you maintain your standard of living, even in a scenario where you're facing additional expenses and a potential loss of work.

It can be difficult to imagine a day when you might receive a serious medical diagnosis; no one likes to envision such a scenario. But some critical illnesses are quite common: Nearly 800,000 Americans have a stroke each year, and strokes are the most common cause of adult disability.Nearly 40% of people will receive a cancer diagnosis in their lifetime.2

The costs of cancer treatment are constantly on the rise as new treatments are developed.4 Understanding your risk factors and likelihood of receiving a critical illness diagnosis can be helpful as you plan for the future.

Are Critical Illness Riders Worth It?

The answer to this question is highly personal — and you're the only one who can decide — but there are some considerations to take into account as you consider for yourself.

For many people, a critical illness rider provides some reassurance that they will be better able to address the expenses if they ever receive a serious medical diagnosis. This is often a compelling enough reason to add a critical illness rider.

You may also want to evaluate your savings and consider how you would pay for the potentially hefty expenses associated with serious health conditions. Hospital stays can add up to tens of thousands of dollars. The ballpark estimate for cancer treatment is around $150,000.3

It's also a good idea to review the details of your health insurance plan. It may cover some but not all of the costs associated with critical illnesses. You may encounter expenses you never expected, such as having to hire someone to help clean your home or employing a caretaker for hands-on assistance. Even transportation to and from medical appointments can add up quickly. Think about whether you already have a savings cushion that could support you and your family for months or years while you manage your health or if you might benefit from the option to tap into your life insurance benefits early.

Bottom Line

The choice to add a critical illness rider to your life insurance policy comes down to your values and your budget. Adding one usually means an extra cost. If you can't afford a higher premium for the rider's additional coverage, it may not be worth stretching your budget to add it. You might also decide that a rider isn't in your budget now but could be if your income increases or your budget frees up.

Before deciding whether a specific type of rider is worth it for you, it's a good idea to compare different types of riders. Depending on your lifestyle and your priorities, it may make sense for you to personalize your life insurance policy with another type of rider, such as accidental death or long-term care. A qualified financial professional can help you weigh your options and consider your particular circumstances to decide what coverage may better suit your needs.


  1. Brain basics: Preventing stroke. National Institutes of Health. https://www.ninds.nih.gov/health-information/patient-caregiver-education/brain-basics-preventing-stroke. Last updated July 25, 2022. Accessed August 3, 2022.
  2. Cancer statistics. National Cancer Institute. https://www.cancer.gov/about-cancer/understanding/statistics. Last updated September 25, 2020. Accessed August 3, 2022.
  3. The cost of cancer. SERO Group. https://treatcancer.com/blog/cost-of-cancer/#how-much-does-cancer-cost. Updated 2022. Accessed August 3, 2022.

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Information provided is general and educational in nature, and all products or services discussed may not be provided by Western & Southern Financial Group or its member companies (“the Company”). The information is not intended to be, and should not be construed as, legal or tax advice. The Company does not provide legal or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. The Company makes no warranties with regard to the information or results obtained by its use. The Company disclaims any liability arising out of your use of, or reliance on, the information. Consult an attorney or tax advisor regarding your specific legal or tax situation.