What is a Critical Illness Rider? - Insurance Rider Series 3
It is week three of our series of posts about life insurance riders. This post is all about critical illness riders and what they do, why someone would want one, and a special type of critical illness rider known as a second event rider.
If you haven’t already read the previous posts about what an insurance rider is, and term riders, we recommend you give it a look before you or after you read this.
What is a critical illness rider?
Well it’s an insurance rider designed to provide a lump sum payment to policyholders who are diagnosed with a covered illness, such as cancer, heart attack, stroke, kidney failure, and other conditions that no one wants to have.
There are several reasons why someone may choose to add a critical illness insurance rider to their life insurance policy in Canada.
One reason is to ensure that they have financial support if they are diagnosed with a serious illness.
A critical illness can be emotionally and financially draining, and having a lump sum payment from a critical illness insurance rider can help alleviate some of the financial burden.
It can help cover expenses such as medical bills, home renovations to accommodate for a disability, or lost income due to taking time off work.
In fact, a common expense critical illness pay outs are used for is to pay for the travel and accommodations for loved ones to come and stay with those who experience such illnesses.
Critical illness riders and disability insurance coverage.
Another reason to add a critical illness insurance rider is to complement disability insurance coverage.
Disability insurance covers loss of income due to a disability, while critical illness insurance provides a lump sum payment to cover expenses related to the illness itself.
Having both types of insurance can provide a comprehensive safety net in the event of a serious illness.
It is important to note that critical illness insurance riders typically have specific terms and conditions, including the types of illnesses covered.
It is important to review the policy details and consult with a financial advisor or insurance agent to determine if adding a critical illness insurance rider is the best option for an individual’s needs and circumstances.
Second event riders
A more specific type of critical illness rider, only provided by Canada Life, is called a second event rider.
A “second event” rider provides additional coverage for a specific condition if the person has already suffered a certain covered condition.
For example if an individual had received a critical illness benefit for a Heart Attack or Stroke prior to age 65 the second event rider will cover them for Life-Threatening Cancer if it occurs within 11 years of the survival period.
This ensures that if they are to suffer multiple illnesses. Then all their bases are covered, and they will be financially protected.
Contact Us
At Safe Pacific Financial, we specialize in helping Canadian business owners, incorporated professionals, and investors structure life insurance for maximum wealth protection, tax savings, and business growth.
If you would like to discuss whole life insurance or investments, we’re happy to chat and see if we can be a good fit to work with you. Fill out our contact form and we will get back to you within 24 hours on business days.
Related Insights
Episode 5 of the Infinite Banking Concept Series - Leaving a Legacy
Welcome to the fifth and final blog in our comprehensive series about the Infinite Banking Concept in Canada. Throughout these four previous blogs we’ve talked about...
Episode 3 of the Infinite Banking Concept Series - How Policy Loans work and what is the Adjusted Cost Basis?
Let’s look at a Whole Life Insurance Policy Illustration that's correctly set up for the Infinite Banking Concept. In this illustration with a Canadian life...
What is the Immediate Financing Arrangement?
Who is this for? We tell everyone that they shouldn’t set this up unless they want and need life insurance. If you have someone you...
Infinite Banking is a scam!
Is Infinite Banking as good as everyone says it is or are they scamming you? We’ll answer that today.
Should you invest using DCA or a lump sum?
So, what investment strategy is going to you the most money, dollar cost-averaging or a lump sum investment? I can’t see the future but based...
The Ten Commandments of Whole Life Insurance in Canada
There’s this great article titled “the ten commandments of whole life insurance” and it is linked if you want to read along. One thing that’s...
The Waterfall Concept using Life Insurance (in Canada)
The “Rockefeller” Method, or the Waterfall Concept. One of the main things we have to preface this with is that in the United States, this...
How can a Canadian business owner use life insurance to fund major purchases?
Today, allow us to shine a light on the infinite banking concept through the lens of a case study —showcases how an entrepreneur, used this...
You can now invest with us!
We have got a big update for you today – a brand new offering from us at Safe Pacific.
The Infinite Banking Concept Episode 4 – Infinite Banking is a Scam
In today's blog, we'll go over the main reasons given for why the Infinite Banking Concept is a scam. We'll be going over why people...
The Wealth Multiplier Podcast - Wealth and Legacy: A Deep Dive with Vince Cardella
In this episode of The Wealth Multiplier Podcast, host Laurent Munier of Safe Pacific Financial sits down with Vince Cardella, Principal of Strategic Wealth Planning...
RRSPs for Canadian Business Owners, should you invest?
You have two main options: keep the funds inside the corporation or withdraw and invest personally. Today we’re going to go through these 2 scenarios...
