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.
Series
What are Insurance Riders? - Insurance Rider Series Part 1
What is a Term Rider? - Insurance Rider Series 2
What is a Critical Illness Rider? - Insurance Rider Series 3
What is a Guaranteed Insurability Rider? - Insurance Rider Series 4
What is a Disability Waiver of Premium Rider? - Insurance Rider Series 5
What are Child and Spousal Riders? - Insurance Rider Series 6
What is a Return of Premiums Rider? - Insurance Rider Series 7
What are Paid-Up Addition Riders? - Insurance Rider Series 8
Next Steps:
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