FAQ: Chronic Illness Rider

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What is a rider?

A rider is an electable provision of an insurance policy that gives you the option of supplementing your coverage with additional benefits.

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How does the Chronic Illness Rider work?

Applying to add this rider to your policy gives you the ability to collect up to 50% of your benefit amount, up to $500,000, if you become permanently chronically ill.  This money is paid directly to you to be used as you see fit.  That could be help with the cost of care, pay living expenses, replace lost income, even compensate a family member who takes time off work to care for you.  There are no restrictions.

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What is a permanent chronic illness?

That’s defined as one of two things:  the permanent inability to perform two of six activities of daily living – bathing, dressing, eating, toileting, transferring, continence — or as a permanent severe cognitive impairment requiring substantial supervision.

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Who is eligible for this added protection?

Both you and your spouse, ages 20-64, can apply for the Chronic Illness Rider.  You can apply at the same time you apply for WAEPA Group Term Life Insuranceor separately if you are already insured.

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Is a medical exam necessary?

No physical exam is required, but you will need to answer a few health questions over the phone 

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Are benefits taxable?

These benefits are not intended to be taxable.  But you should consult with a tax advisor to ensure that’s not the case with your personal situation.

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Are premiums tax-deductible?

Premiums are not deductible on your federal income tax form. 

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Can I be turned down for this coverage, even if I’m approved for life insurance?

It’s not likely, but it is possible to be approved for life insurance and be turned down for a Chronic Illness Rider.  They are considered two separate insurance options with separate medical underwriting requirements in order to qualify.

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How much does this rider cost?

This added coverage typically adds just one to five percent to your life insurance premium.  Find the rate for your age on our rate calculator.

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Will this rate increase when my life insurance rate goes up?

Rates will increase over time, as you enter a new age bracket. 

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What happens to my life insurance, if I add this rider now and decide I don’t want it later?

That’s not a problem.  You can cancel your rider at any time without impacting your life insurance policy.

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If I pass away before collecting my full rider payments, will the balance be lost?

You don’t risk losing benefits with this added coverage.  Any remaining benefits will be paid to your beneficiary.

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Can I add the rider to my existing WAEPA Group Term Life Insurance?

Yes. All you have to do is apply by completing the Rider-Only Application option.  You will be contacted regarding your current health status to determine approval.

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How long does the rider remain in effect?

The rider can remain in effect until age 80.  It will end earlier if maximum benefits are reached, if you discontinue your rider, or the group term life insurance policy ends. 

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How do I file a claim?

All you do is submit a simple claim form and have your healthcare provider certify that you suffered from a qualifying chronic illness or permanent severe cognitive impairment for at least 30 consecutive days.  Such medical evidence must be certified each year benefits are paid.

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How do I apply for this additional protection?

You can apply online at the same time you apply for group life insuranceor separately, if you’re already insured.  Just complete the appropriate applications.  No medical exam is required.  Applicants will need to answer a few health questions by phone.


Chronic Illness Rider (CIR)

This is a life insurance benefit that also gives you the option to accelerate some of the death benefit in the event that you are certified with a chronic illness as described in the certificate.

IMPORTANT NOTICE: This rider is not intended to be a federally tax-qualified long-term care insurance contract under Internal Revenue Code (IRC) Section 7702B. Therefore, the premiums payable for this rider do not qualify as long-term care insurance premiums and are not deductible from gross income for federal income tax purposes. This rider, however, is subject to the federal per diem limits set forth in IRC Section 7702B. Under this rider, New York Life will not pay claimants more than the federal per diem limits. Assuming the amount you receive in the aggregate from all applicable policies does not exceed the federal per diem limits set forth in IRC Section 7702B, the benefits provided by the Chronic Illness Rider are intended to be excludable from federal gross income under Section 101 (g) of the IRC.

Receipt of an accelerated death benefit may affect eligibility for Medicaid or other government benefits or entitlements and may have income tax consequences. Accelerating benefits before applying for these programs, or while you are receiving government benefits, may affect your initial or continued eligibility. Clients can contact the appropriate social service agency (e.g., the Medicaid Unit of your local Department of Public Welfare or the Social Security Administration Office) for more information.

**The following states are not eligible for CIR: ID, LA, MN, NY, OH, UT, WA, all U.S. Territories

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