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Critical Illness Coverage Explained: What Conditions are Typically Covered?

What is a Critical Illness Rider?

A critical illness rider is an add-on to an existing life insurance policy that provides a lump sum payment to the policyholder if diagnosed with a severe illness. In other words, instead of your beneficiaries receiving the death payout after you pass away, you and your loved ones can access the death benefit while you’re still alive. This cash payout can be used to cover medical costs, debt, or any other expenses that may arise. 

Life-threatening illnesses, such as cancer, often come with a drawn-out and expensive treatment process that can leave you and your loved ones financially drained. Thankfully, many insurance companies offer a critical illness rider for those who want to ensure they’re financially secure in the event of a diagnosis. 

Protecting Your Loved Ones in Times of Uncertainty 

Heart disease and cancer are the leading causes of death in the United States. Unfortunately, the treatment cost for these life-threatening illnesses remains unaffordable for many people. For example, if you do not have health insurance and are diagnosed with breast cancer, your treatment cost can be over $120,000. Heart disease treatment costs are much the same. On average, coronary artery bypass or aortic surgery for treating myocardial infarction (heart attack) costs $151,271 without health insurance. Even if you’ve invested in health insurance, you can still face steep out-of-pocket costs. 

The above costs indicate why you may want to consider adding a critical illness rider to your policy, especially if you do not have emergency funds and are the household’s primary breadwinner. If eligible, this rider can provide lump-sum payments to help you shoulder hefty medical costs and other living expenses when you take an extended leave of absence from work for treatment.

How Does a Critical Illness Rider Work? 

With a critical illness rider, you could receive a lump sum payout from your life insurance company if you prove that you’ve been diagnosed with a life-threatening illness. You can then use the cash benefit to cover your medical treatments, lost income, or other expenses. However, it’s essential to understand that since you’re tapping into your death benefit early, you’re reducing the payout your beneficiaries will receive once you pass away. 

It’s also worth noting that being diagnosed with a life-threatening illness does not mean you’re automatically eligible for a payout since the survival period and the waiting period of your rider can come into play. The survival period is the length of time you must survive after the diagnosis to receive a portion of your death benefit. And the waiting period is the time you must wait before your coverage activates. If you pass away before the survival period ends or are diagnosed with a severe illness during the waiting period, you will not receive a lump sum payout from your critical illness rider. 

Eligibility requirements for these riders can vary depending on the life insurance company, but you typically need to be at least 18 years old. The older and unhealthier you are, the higher your premium might be, though it could also vary depending on the amount of coverage and the life insurance company you choose. 

Eligibility Criteria For a Critical Illness Rider

As mentioned previously, the eligibility criteria for a critical illness rider may vary depending on the life insurance company. But in general, you could expect the eligibility requirements to closely resemble what’s listed below. 

Minimum Age
Maximum Age
Term Length
Same as your life insurance policy term
Guaranteed Sum
40% to 80% of the death benefit amount (depending on the illness)
Waiting Period
90 days
Survival Period
14 to 30 days

What Does a Critical Illness Rider Cover? 

Some illnesses and conditions your rider may cover include the following:

  • Heart conditions, such as heart attacks or issues that require a coronary artery bypass or aortic surgery. 
  • Neurological issues, such as loss of speech, stroke, or seizures. 
  • Life-threatening cancer, such as breast cancer, bowel cancer, and lung cancer. 
  • End-stage renal disease.
  • Amyotrophic lateral sclerosis.
  • Major organ transplant or loss of limb. 
  • Major burns. 

Note that every life insurance company is different and may or may not cover the abovementioned conditions. So check with your life insurance company to see the exact types of critical illnesses they cover. 

What Is Excluded From a Critical Illness Rider? 

While exclusions may vary depending on the insurance provider, here’s a list of the most common types of conditions that may not be covered by your rider. 

  • Tumors that are pre-malignant, non-malignant, or non-invasive. 
  • Severe illnesses that were diagnosed during the waiting period. 
  • Critical illnesses that resulted from the covered person voluntarily participating in an illegal activity. 
  • Illnesses that resulted from the covered person intentionally causing a self-inflicted injury. 
  • Some types of cancer, such as non-melanoma skin cancer. 

How Much Does a Critical Illness Rider Cost? 

The cost of your rider can vary depending on factors such as your age, health condition, and coverage amount. How much you pay for the rider can also differ based on the life insurance company you choose. For example, while most providers will charge an additional premium, some providers offer critical illness riders with their term life insurance policy at no additional cost.

But in general, critical illness riders are relatively affordable. For example, if you’re a healthy 30-year-old who does not smoke, you can expect to pay around $10 a month on top of your life insurance premium for $50,000 of coverage benefits. However, if you’re older, have pre-existing health conditions, and are a frequent smoker, you can expect to shell out over $50 a month for the same level of coverage. 

Should You Add a Critical Illness Rider To Your Life Insurance Policy?

Critical illness riders may not be necessary for everyone, and whether you should add a critical illness rider to your life insurance policy largely depends on your unique circumstances. However, with medical debt being the largest single cause of bankruptcy in America, it may be worth taking the time to research the benefits of this kind of rider, especially if you have a family history of any of the aforementioned illnesses.

Consider a Critical Illness Rider If… 

  • You do not have enough savings put aside to cover a medical emergency or treatment for severe illnesses. 
  • You’re the primary breadwinner of your household and have loved ones that depend on you. 
  • Your family has a history of life-threatening illnesses such as breast cancer or heart attacks. 


  • Low Cost: These riders typically do not cost much. Depending on your health condition and age, you may be able to find plans that cost as little as $10 a month. 
  • Minimal Underwriting: Most life insurance companies require little to no underwriting for adding a critical illness rider to your existing policy. 
  • Flexibility: If you want to cancel your rider, most life insurance companies allow you to drop the add-on by simply filling out a form to authorize its removal. 
  • Pays Out a Lump Sum: The lump sum cash benefit allows you to cover emergency expenses without having to wait for monthly payouts. 


  • It does not cover every type of illness. These riders may not cover certain types of cancer, such as non-melanoma skin cancer. They also would not cover tumors that are not life-threatening.  
  • It must be purchased with a base plan. Because the critical illness rider is an add-on, it can not be bought independently, and you must pair it with a life insurance plan. 

How to Get a Critical Illness Rider To Your Policy 

You can typically add a critical illness rider at the time you purchase your life insurance policy online. If you want to add this rider after your life insurance policy has already come into effect, you may have to submit an application or take a medical exam to verify your health condition. 

The exact process of adding a rider may vary depending on the life insurance company, so contact your insurance provider directly if you have any questions. Also, be sure to carefully review the rider’s terms and conditions, as well as any limitations and exclusions, before adding it to your existing policy. 

Alternatives to a Critical Illness Rider

If you do not think the critical illness rider is the right fit, here are some alternatives to consider to help cover life events your standard life insurance policy does not. 

Final Expense Life Insurance

Final expense life insurance riders can be a better fit for those simply looking for a death benefit to alleviate their impending funeral expenses. Final expense life insurance, or burial insurance, helps cover your end-of-life expenses such as funeral arrangements, cremation costs, and remaining medical bills. 

Long-Term Care Rider 

Instead of a lump sum payment, long-term care riders provide a monthly cash benefit to cover nursing-home care or other assisted-living costs if you have a chronic or disabling condition that needs constant supervision. Compared to a critical illness rider, which only covers specific life-threatening medical conditions, a long-term care rider may offer more comprehensive coverage. 

Return of Premium Rider 

A return of premium (ROP) life insurance rider is an add-on that refunds a percentage of your term life insurance premium payments if you outlive the policy term. This rider could be a good alternative to a critical illness rider as the latter only pays out when you’re diagnosed with a specific illness, whereas the return of a premium rider does not have such requirements. 

Disability Insurance 

Disability insurance covers your policy premiums if you become disabled and can not work.  It’ll also provide a tax-free benefit payment each month until you recover and can return to work or until the policy terminates. If you work in a high-risk work environment, such as construction or manufacturing, disability insurance could be a wise alternative to consider. 

Flexible Spending Account (FSA) 

A Flexible Spending Account (FSA) is an employer-sponsored healthcare benefit that allows you to set aside pre-tax dollars to pay for eligible out-of-pocket medical expenses. For the 2023 tax year, you can contribute as much as $3,050 to your FSA. This healthcare benefit can be especially helpful if you have chronic illnesses and require ongoing medical care. Unlike a critical illness rider which only covers those who are diagnosed with specific illnesses, an FSA is available to most full-time employees. 

Putting It All Together

No one expects to be diagnosed with an illness. But the reality is that it could happen to anyone. To financially safeguard you and your loved ones in the event of a life-threatening illness diagnosis, consider purchasing a critical illness rider or one of the many alternatives. Speaking with your life insurance representative can be a good place to start if you want to learn more about the options available and determine which suits you best. 

Plan for your family’s future. Get a life insurance quote today.

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Plan for your family’s future. Get a life insurance quote today.

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