Chronic, Critical & Terminal Illness Riders: What’s the Difference?

Chronic, Critical & Terminal Illness Riders: What’s the Difference?

by Leslie Freeland, May 17, 2019

Like most financial products, life insurance is not one-size-fits-all.

The world of life insurance can often be confusing. There are many different types of insurance and different types of add-ons available (called riders). There is often confusion about the differences between these three specific riders: Chronic, Critical and Terminal Illness riders.

So what are the differences between them?

The key difference is that their payouts are each triggered by a different set of circumstances.

Before we get into that, it’s important to understand what a rider is. A rider is an addition to your standard life insurance (or mortgage protection life insurance) policy. It pays for medical care and non-medical care that your main life insurance policy would not cover without riders.


Before we talk about the differences, it would be helpful to talk about how these riders are similar. For one, they all pay out what’s called a living benefit – that means that once their conditions are met, they all pay out while you’re still alive. Second, they all pay out as a lump sum once the claim is approved.

The similarities end there, though. Now let’s dive into what makes each type of rider unique.

Chronic Illness Rider

A chronic illness is defined as an illness which is not life-threatening but lasts for a lifetime such as arthritis.

A Chronic Illness rider pays out when you are medically diagnosed as being unable to perform at least two of the six basic acts of daily living:

  • Bathing: get into and out of the bathtub, wash, brush teeth, shave, or perform other grooming activities
  • Dressing: pull clothes on, fasten buttons, or close zippers
  • Eating: manage the silverware to eat independently
  • Transferring: walk or otherwise transfer from the bed to a wheelchair and back
  • Toileting: get on and off the toilet without help
  • Continence: to control bladder and bowel functions

When this rider pays out, it acts like an advance on your main insurance policy’s death benefit – it will reduce the death benefit by the amount of the payout. So if, for example, you have a $50,000 life insurance policy with a $10,000 chronic illness rider, and you receive that $10,000 payout from your chronic illness rider, your death benefit will be reduced to $40,000.

Critical Illness Rider

A Critical Illness rider covers you for unexpected expenses in the event that you suffer a life-threatening illness, such as cancer, a heart attack or stroke.

The difference between this and a terminal illness rider is that, with a critical illness rider, the illness is one that you will probably recover from.

Critical illness insurance can be purchased either as a standalone policy or as a rider on your existing policy. If purchased as a rider, it will often reduce the death benefit by the amount of the payout, similar to a chronic illness rider.

Terminal Illness Rider

A terminal illness is one that meets the following conditions:

  • You are given fewer than 12 months to live (sometimes 24 months depending on the company)
  • The illness was diagnosed as terminal after the policy was purchased
  • The illness cannot be cured by any means

Here, the difference between a terminal illness and the other types of illnesses is that you are not expected to survive a terminal illness beyond the short term. Like the other types of riders, a terminal illness rider pays a lump sum amount as a living benefit and this reduces the amount of the payout when you pass away.



As you can see, there are many differences between Chronic, Critical and Terminal Illness riders. If you’re not sure which type of coverage might be best for you, we are happy to help.





Asurea offers Life Insurance, Mortgage Protection Life Insurance, Medicare Supplements, Final Expense Insurance, Disability Insurance, Retirement Planning products and more. To find out more, click on the ‘Learn More’ button below. Want to have articles just like this delivered to your email? Just enter your email address below and click ‘Subscribe.’

This information is provided for general consumer educational purposes and is not intended to provide legal, tax or investment advice.

Leslie Freeland

Leslie Freeland

Find her at LinkedIn
Leslie joined Asurea as the Marketing Communications Coordinator in February 2015. Since then, she has been working closely with insurance professionals to educate the public on the importance of life insurance and protect the public from common scams with informational articles.
Leslie Freeland