Life Insurance with Chronic Illness Rider: A long term care alternative?

Life Insurance with Chronic Illness RiderMany life insurance companies offer a terminal illness rider. Such a rider allows the insured to use a portion of their death benefit while they are still alive, if a doctor deems the policyholder terminally ill. Terminal illness riders are usually included with most life insurance policies at no additional cost; however, some life insurance companies have come out with riders that allow even more flexibility in using death benefit while the insured member is still alive. In this article, I want to highlight some features provided for the chronic illness rider, which are included with all life insurance policies from North American Life & Health Insurance Company.

Life insurance is one of the best investments that you’ll ever make for your loved ones. It’s one of the few ways you can ensure your family will have the money they need, regardless of what happens to you.

How a Chronic Illness Rider and Accelerated Benefits Work

When a chronic illness rider is included in your life insurance policy, you don’t need to be terminally ill to use your death benefit while you are alive. You can withdraw cash from your death benefit after suffering serious health complications which result in need of assisted living or supervision for at least 90 days. This feature is not only versatile, but it is also highly transparent and user-friendly. Those who apply for a cash payment will know how much they receive and how it will affect their death benefit value immediately.
This feature is an accelerated death benefit endorsement (or an ADBE) which allows the insured to push for a portion of their death benefit amount when they suffer a debilitation which impairs their ability to accomplish their daily routines. Since debilitating life events such as major accidents can alter our way of life and quickly become financially taxing, this allows the insured to accept a part of their death benefit while they’re still living.

Best of all, those who opt in for this benefit after a serious medical event can receive a quick one-lump sum payment, called an election, annually based on their coverage. In addition to this chronic illness rider, those with North American Company also have access to more traditional riders offered. One of these is the terminal illness rider, which provides cash if you are in a qualifying condition.

Considerations for Applicants With a Chronic Illness Rider

Of course, if one already is chronically or terminally ill, they won’t qualify for life insurance. It can be nearly impossible for those who are ill or elderly to find a new policy. Bearing that in mind, the key is to have the coverage in place before the need arises. Consider that having a policy with a chronic illness rider can be a good alternative to buying a long term care policy. While life insurance with a chronic illness rider generally won’t have as robust a coverage as a stand alone long term care policy, the cost can be significantly cheaper while providing both long term care coverage along with a life insurance death benefit.

As Long Term Care policies have become increasingly expensive, and insurance companies are scaling back the benefits of those policies, a “hybrid” life insurance policy — offering both a death benefit and chronic illness coverage — has gained in popularity. The other benefit of having life insurance and long term care is that if you never need the long term care coverage, you still have a death benefit — unlike traditional long term care policies, which don’t provide any benefits if you don’t end up needing the coverage. This improved sense of equity has become a leading contributor to the increasing demand of hybridized policies.

How Much Life Insurance Do You Need?

While it’s important you have the additional riders for your coverage, the most important factors is determining how much life insurance you should buy. Not having enough life insurance is one of the worst mistakes that you could make for your loved ones.

The first number you should put in the equation is debts and final expenses. The primary goal of your life insurance is to give your loved ones the money that they need if you were to pass away. Before you buy life insurance, add up your mortgage, business loans, student debts, and any other major expenses. Make sure your policy is large enough to coverage all of those bills without leaving any of it to your family.

The next number you should put in the equation is your annual income. The second goal of your life insurance is to replace your paycheck if something tragic were to happen to you. If you’re the main source of income in your household, then your family may struggle without your money. Make sure your policy will give your family enough money to pay for any monthly bills and expenses.

The last number you should add is any funeral bills or expenses. The average funeral costs $10,000, which can be difficult for a family to cover. Your life insurance should give your loved ones the money they need to pay for your burial without emptying their savings account.

How Much Do Riders Cost?

When you’re shopping around for life insurance and trying to decide what kind of coverage and riders you need, premiums rates are going to be one of the most influential factors. Every rider you add, either chronic illness or long-term care, is going to raise how much you pay every month depending on the company you choose. Some insurance companies include additional riders on your plan at no additional cost. Other companies are going to charge you for every rider you add.

Just like with a life insurance policy, the amount you’ll pay for the riders is going to differ depending on the company you choose. Each company has different rating systems they will use to calculate premiums. Some companies will charge more for riders compared to what other companies charge.

If you want to get the cheapest life insurance and riders available, the best way to do that is to compare dozens of quotes before you decide which one is best for you. Some companies are going to offer much more affordable rates for their riders than other companies. The quotes you get for your insurance are going to vary wildly depending on the one you contact. Instead of wasting hours and hours calling different companies, let one of our independent insurance brokers do all the work for you. Unlike a traditional agent, we don’t work with one single company.  Instead, we work with dozens and dozens of highly rated companies across the nation and we can bring all of the best quotes straight to you.

It’s impossible for us to say how much you would pay for your rider. In most cases, riders are extremely affordable to add. Some riders will only add a couple dollars to your premiums every month. These plans can be the perfect way to fill in some of the gaps your life insurance doesn’t cover. You never know what’s going to happen tomorrow, which means you shouldn’t wait any longer to get the life insurance and rider protection your family needs.

Bottom Line

If you have any questions about chronic illness riders or long-term care riders, please contact one of our agents today. We would be happy to answer those questions and ensure you’re getting the best coverage for your loved ones.

Not only can we help you find the cheapest life insurance plan, but we can find a company which offers cheap rides for your coverage. There are over 800 life insurance companies on the market, and each of them has different insurance products. You could spend days and days calling companies to find affordable life insurance with riders. Working with one of our agents can save you both time and money on your insurance.

Compare rates for life insurance using our quote tool on this page, or contact us to discuss quotes, answer your questions or apply for life insurance at 888-552-6159. 

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Doug Mitchell

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Comments (5)

  1. George Zeidan says:

    I have Crohn’s disease, and I talked to someone from Liberty Life Assurance, and they have terminallt and chronic illness on their policy. What other life insurance companies offer this kind of policy?

    I am searching for something I can afford, probably term life. I was looking at a $500,000 policy for 30 years and I am trying to compare prices

    1. Doug Mitchell says:

      I would like to discuss your options. I will need more information about your health. You can call at 800-712-8519.

  2. SNDaughter says:


    I am looking for the right insurance for my 70 year old dad. He is currently staying with me as a G4-dependent visa since my husband works for the international organization in D.C. However, he is currently not covered under my family insurance and I am exploring the best insurance for him to protect him from any elderly/chronic illness in the next 10-20 years. He is a very healthy person at his age now as he swims/jogs almost once/twice every week.

    Thank you in advance

    1. Doug Mitchell says:

      Yes, we can help. Give us a call at 888-552-6159.

  3. Fiona says:

    I am 28 and have a chronic (not terminal) disease. I do not plan on having children.

    Are there any life insurance policies/riders that would benefit me?

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