A critical illness accelerated benefit rider differs from a terminal illness accelerated benefit rider primarily in that it:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A critical illness rider accelerates a portion of the death benefit when the insured is diagnosed with one of the listed critical conditions, such as cancer, heart attack, stroke, or kidney failure. A terminal illness rider, by contrast, requires a terminal prognosis with a limited life expectancy. Both riders reduce the death benefit remaining for the beneficiary, and both typically pay a lump sum. The critical illness rider is broader in trigger because it pays upon diagnosis rather than waiting for a terminal condition. The list of covered illnesses is defined in the rider at issue.
Why the other options are wrong
- Both types of riders reduce the remaining death benefit by the amount accelerated; neither pays the full benefit without reduction.
- Critical illness accelerated benefits are available on individual policies as well as group policies, not group-only.
- These riders carry a premium charge for the additional benefit; they are not free.
Memory hook
Critical illness pays on the diagnosis; terminal illness waits for the prognosis.