What is Chronic Illness Insurance?

What is Chronic Illness Insurance?

by Leslie Freeland, August 17, 2017

Chronic illness insurance is a rider, or addition, to your standard life insurance (or mortgage protection life insurance) policy. It pays for medical care and non-medical care that your health insurance does not cover.

Chronic illness insurance may be needed more and more these days because people are at a greater risk of developing a chronic illness due to a poorer diet, lack of exercise and being overweight.  The average American lifestyle puts you at risk of getting a chronic illness even if you are young.

A chronic illness is one that lasts for a lifetime.

The illness or condition cannot be cured and doesn’t go away on its own. Cancer, heart disease, and stroke are some common causes of chronic illness. With the right treatment, you can survive many of these illnesses, but they often leave you with a chronic condition of some sort.

In addition to the need for ongoing medical treatment, you may also need help doing necessary daily activities. The six activities that people with chronic illness are most likely to have problems with are called Activities of Daily Living, or ADLs.

The chronic illness rider pays you if you have been diagnosed with a chronic illness, AND you are unable to perform at least

…two of the ADLs.

Activities of Daily Living

A chronic illness may occur suddenly and prevent you from being able to do many of the things that you take for granted every day. For example, a stroke can instantly take away your ability to move your arm so you can no longer feed yourself or brush your hair. Problems with vision and balance could prevent you from walking.
Other illnesses may cause an increase in symptoms over time. For example, you may still be able to perform all of the ADLs when you first receive a diagnosis of cancer, but over time, your ability to perform the ADLs lessen. Sometimes early symptoms are mild, and they don’t interfere with your ability to live your life. As the condition advances, the symptoms of the disease or treatment may have a greater impact.
Once you get to the point where you are unable to perform two or more ADLs, your chronic illness insurance will be there to help with your expenses.

The six ADLs are:

  • 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

How Chronic Illness Insurance Works

Most chronic illness insurance is offered as a rider to your life insurance; not as a separate policy.

This means that you get to choose to add this coverage to your standard life insurance (or mortgage protection life insurance) policy. The rider will list the chronic illnesses that it covers and the number of ADLs that you must be unable to perform (usually two).

When you take out a standard life insurance policy for a certain amount of money (the death benefit), this amount of money will be paid to your loved ones when you die. The chronic illness rider allows you to get a portion of the insurance money in advance that would normally go to your loved ones. You will be able to decide how much you want your policy to cover when you purchase your life insurance (or mortgage protection) policy.


For example, you take out a life insurance (or mortgage protection) policy for $50,000 with a chronic illness rider for $10,000. Then you get diagnosed with a chronic illness. You would then receive the $10,000 in a one-time payment. The money is tax-free, and you can use it however you need to, not just for medical expenses. You can pay your healthcare bills, your mortgage, your in-home care and more.

The $10,000 you receive is part of the insurance money (death benefit) that would have gone to your loved ones. Now, there will be $40,000 left for them. The rider is not additional money. It is part of the insurance money from your life insurance policy that you can get while you are still alive (also known as ‘living benefits’).

Check on Payment Status

When you get life insurance (or mortgage protection) with a chronic illness rider, find out if you will still have to pay premiums (your monthly payments) if you have a chronic illness. Some policies allow you to stop paying once you have been diagnosed with a chronic illness to protect you from the monthly expense. This will also ensure your policy doesn’t get canceled if you forget or are unable to pay.

Why Health Insurance Isn’t Enough

What would happen to your income if you became seriously ill? Even if you have good health insurance, you might be unable to pay your premiums if you couldn’t work.

When you have a chronic illness, you may need medical treatment for the rest of your life. This may include medications, physical or occupational therapy or special medical equipment. Your health insurance may not pay the entire cost of these treatments. Some will not be covered at all.


Medical bills are the leading reason that people file for bankruptcy in this country.

Many people who become ill and require expensive, medical treatment often find bankruptcy is their only option. Even those with health insurance may be unable to meet the high cost of care that their insurance doesn’t pay.
Some people might put off getting treatment or not even get treatment at all. Failing to get medical care for a chronic illness will reduce your quality of life. It will also shorten the amount of life that you have left.

Limited Choices

Another issue related to health insurance is that the insurance company limits your choices. There may be medications or treatments that will work better for you, but many insurance companies will only pay for the cheapest options.

Chronic illness insurance gives you more options. You can use the money to pay deductibles, copays, and costs not covered by your health insurance.

Who Is At a Greater Risk for a Chronic Illness?

Stroke, arthritis, heart disease, cancer, and type 2 diabetes are common causes of chronic diseases and conditions. Anyone who matches with any of the conditions below might be at a greater risk for a chronic illness.

  • Being Overweight
  • Smoking
  • Not Getting Enough Exercise
  • Drinking Alcohol
  • Not Getting Enough Sleep
  • Eating an Unhealthy Diet

If any of these apply to you, take steps now to change your lifestyle to reduce your risk of developing a chronic illness.

Know Your Choices

In addition to chronic illness insurance, there are many other rider (add-on) options to your life insurance or mortgage protection. Make sure to discuss all of your options with your insurance agent. In addition to, or instead of, chronic illness insurance, you may choose long-term care insurance or a waiver of premium rider. You have more options than you know!




Asurea offers Life Insurance, Mortgage Protection Life Insurance, Medicare Supplement Insurance, Final Expense Insurance, Disability Insurance, Long-term Care Insurance, Retirement Planning products and more. For additional information, click on the ‘Learn more’ button below. Want to have articles just like this delivered to your inbox? Just enter your email address in the box below and click ‘Subscribe.’

This information is provided for general consumer educational purposes only and is not intended to provide legal, tax or investment advice. Dollar amounts are for illustrative purposes, not actual.

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