Critical illness riders vs critical illness insurance — which one should you choose?


A critical illness rider is like a smaller version of a full-scale critical illness insurance plan. It still gives you some coverage in case you become seriously sick with one of the covered illnesses. But it has a lot more limitations than a full plan does. Understanding the pros and cons of a rider vs a full policy is the best way to determine which one to choose.

By Parmeet Singh
Insurance Advisor, LLQP
11 min read

There’s more than one way to get critical illness insurance coverage. Getting something called a critical illness rider is an option that often costs less money. But whether it’s better for you to get just a rider vs a full policy depends.

This article can help you take a look at the key features and differences of each, and help you decide which one is better for you to choose.

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What’s the difference between critical illness riders vs critical illness insurance?

A critical illness rider is like a smaller version of a critical illness insurance policy. They’ll both give you a payout if you’re diagnosed with a serious, life-altering illness. But a full policy will normally give you better coverage. An optional rider will be cheaper, but will have more coverage limits.

Think of it like a donut vs a mini donut. They’re both the same thing in a way, but on different scales. Let’s look at the different features of each below.

critical illness riders vs policies

What is a critical illness rider?

A critical illness rider is an optional add-on for your main insurance policy. In Canada, most people add it onto their life insurance as a way to get additional coverage. But you can add it to other policies too, like mortgage insurance or disability insurance.

Riders will still cover you for major illnesses, but they won’t have all the same features a full policy can give you. A rider may also not cover you for as many health issues or for as much money as a full-scale critical illness policy will.

But, it does cost less than a full, separate policy does. And it can be convenient to buy multiple coverages at the same time like this. Critical illness is one of the most common riders Canadians get for their life insurance coverage.

How does a critical illness insurance rider work? 

With a critical illness rider, if you get a serious illness that your insurance provider has agreed to cover, they will pay you out a portion of your life insurance death benefit early.

They will give this to you as a one-time, lump sum payment that’s tax-free. But only once, and only for qualifying illness — which could be as little as 3 or 4.

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There is much variation in the numbers and types of riders offered by various insurance companies. To ensure you get the right policy and type of coverage you want, we suggest enlisting the help of a licensed insurance broker.
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Does a critical illness rider cover the same things critical illness insurance does?

It depends. Most CI riders cover fewer conditions than a full-scale policy will. It depends on the company, though. Some life insurance companies have riders that cover the same number of illnesses as a regular plan. And some of those can cover as many as 26 health conditions. But that’s rare for riders.

Full list of all conditions covered by critical illness insurance in Canada.

What are the pros and cons of a critical illness rider?

The table below shows some of the major pros and cons of getting a critical illness rider.

Critical Illness Insurance Rider: Pros and Cons

Pros Cons
Lower cost Limited flexibility — you can’t customize it as much as a full policy
No underwriting — it comes with an insurance policy so underwriting has already been done Attached to another policy — if you lose that coverage, you also lose this rider
You can cancel it without losing the insurance policy it’s attached to You can only get it when you buy a new insurance policy — it can’t be added to an existing policy
Can be convenient to get multiples types of insurance coverage at the same time  No options to get your money back if you don’t submit a claim (return of premium)
Limited coverage amount
May not cover you for as many medical conditions as a full policy would
May not give partial payments for some conditions — check with your advisor
Can decrease your payout for other insurance — if you have to make a claim, the money will be taken from the payout of the insurance policy it’s attached to

critical illness insurance is worth it because of the high likelyhood such illness in Canada

What is critical illness insurance?

Critical illness insurance is a form of insurance that pays you a lump sum if you are diagnosed with a serious illness. The critical illness benefit money can be used for anything you need, like covering costs for:

  • At-home or specialty medical care
  • Prescription medication
  • Other treatment costs
  • Home modifications
  • Debt
  • Lost income
  • Daily living expenses
  • Other financial obligations

Most standalone CI policies will cover at least the major health conditions that are most common in Canada, like cancer, heart disease, multiple sclerosis, and more.

If you get a critical illness diagnosis and you have a standalone policy, you get a full lump-sum payment to use however you need to.

Guide to How Critical Illness Insurance Works in Canada

What are the pros and cons of a critical illness insurance policy?

The table below shows some of the major pros and cons of getting a standalone critical illness plan by itself.

Critical Illness Insurance Policy: Pros and Cons

Pros Cons
Full coverage — can cover up to 26 major illnesses Premium rates can be more expensive than riders and other types of insurance policies
Higher amount of coverage — up to $2.5 million Thorough underwriting process
More customization options and flexibility
Return of premium options — get your money back if you don’t end up having to make a claim
Many plans pay out for partial conditions — such as early-stage cancers
Some plans can give more than one lump sum payout if you get the same illness more than once

Still looking for the best critical illness insurance rates?
PolicyAdvisor saves you time and money when comparing Canada’s top life insurance companies. Check it out!

Is it better to get a critical illness insurance rider or a full policy?

Whether you should get a rider or a stand-alone policy will depend on you and your family’s needs. Both have their pros and cons. It could come down to whether it’s most important that you have a lot of coverage, that you save as much as possible, that you have more flexible options, or more.

? You should get a critical illness rider if…

  • You are about to buy life insurance and you want to get critical illness cover at the same time
  • You want the lowest cost for coverage possible
  • You want to be approved very quickly
  • Optional features and high coverage amounts aren’t as important to you
  • You just want basic coverage

? You should get standalone critical illness insurance if…

  • You need to have a lot of coverage — such as if you’re a high-income earner or if you have a lot of debt
  • It’s important to you to have flexibility to change or customize your policy to fit your exact needs
  • You want critical illness coverage but you already have an existing life/mortgage/disability insurance policy
  • You don’t want to diminish your life insurance payout if you happen to become ill with a life-threatening illness in the future
  • You’re not on an extremely tight budget

How can I buy a critical illness rider?

You can only buy a critical illness insurance rider at the same time you buy a new insurance policy. You will have to buy it from whoever you are buying your full insurance policy from.

At PolicyAdvisor, we have a range of insurance products with the option to add this type of insurance as a rider. Book a call with one of licensed insurance advisors to check quotes and find out more information.

How can I buy a critical illness insurance plan?

It’s much easier to buy a standalone critical illness insurance policy than it is to buy a rider. You can instantly browse critical illness insurance quotes on our website in seconds and compare prices from top providers across Canada.

Just click the button below to take a look at some prices and apply online if you see something you like.

If you would prefer to speak with an insurance professional to get advice one-on-one, we’re happy to do that too! We work with 30 of Canada’s best critical illness insurance providers, so we can help you figure out who has the best options for your needs.

Frequently asked questions

Is a critical illness insurance rider worth it?

It depends on you and your needs. A critical illness rider may be worth it if you just want something basic and are willing to sacrifice flexibility for a low cost.

In our opinion, though, most people are better off getting more comprehensive protection if it can fit in their budget.

Does a regular critical illness plan have the same survival period as a rider?

Yes, critical illness insurance coverage usually has the same survival period whether you buy it as its own policy or as an optional life insurance rider.

The survival period is the amount of time after a diagnosis that you have to live before the insurance provider will give you a claim payout. Most insurance companies have a 30-day survival period.

Does a CI rider have exclusions a stand-alone policy does not?

Yes, the optional rider for critical illness is more limited in many ways.

A lot of CI riders will only cover up to $25,000 for a critical illness. Full coverage could get you up to $2.5 million.

Many riders won’t cover more than a handful of major illnesses. In our experience, most will cover just the basic 3 — life-threatening cancer, heart attack, and stroke. Some may cover up to 26 like a full policy does, but these are pretty rare.

You can cancel a rider and keep the policy it’s attached to, but not the other way around. If your main policy is cancelled, you also lose your rider. Or, if your base policy is only for a 10-year term, your critical illness cover will also only last for those 10 years.

This is not an issue for many. But for some, this can be inconvenient as life changes and they may not be able to change this rider to fit their actual needs.

With term insurance plans, some companies let you convert to permanent life insurance down the line — or to a different type of policy. But, if you had a critical illness insurance rider attached to that term life insurance, you may not have the same options to bring it over to your permanent plan.

What’s the difference between a critical illness rider and a terminal illness rider?

Critical vs terminal illnesses get confused in the insurance world a lot. The main difference is in the severity.

A critical illness is a serious disease. But a terminal illness means the condition is so serious that a doctor has said they expect the person to die within a year or less.

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Terminal illness and critical illness are different

Critical illness riders

Can be added onto a life insurance policy for a small extra cost. If you are diagnosed with a covered illness, your insurance provider will give you a one-time, lump sum payment from your base insurance policy.


Terminal illness riders

Can be added onto a life insurance policy for a small extra cost. But many companies in Canada include this for free in their insurance plans. If someone is diagnosed with a terminal illness and told they only have a relatively short time left to live, the insurance provider will give them a one-time, lump sum payment from their base policy.

Contact us

If you need critical illness protection but you’re not sure whether you should get a full-blown plan or just an add-on rider, we’d be happy to help. Our advisors are licensed and experienced, and can give you one-on-one advice. They can assess your needs and help you figure out what your best coverage options are.

Need help?
Call us at 1-888-601-9980 or book time with our licensed experts.

  • Critical illness insurance is a separate insurance policy
  • A critical illness rider is an add on to a life insurance policy
  • A standalone policy has better coverage options but costs more
  • Riders are cheaper and do not have extra underwriting, but come with a lot more limitations

By Parmeet Singh
Insurance Advisor, LLQP
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