Managing the cost of chronic illness with the Chronic Illness Rider

Plan for chronic illness and find peace of mind by enhancing your Group Term Life Insurance.

If you or a member of your family has ever had to care for a loved one with a chronic illness, you understand the toll it can take physically, emotionally, and financially. For many people, planning ahead for long-term needs has become more of a necessity than ever. Here’s where the Chronic Illness Rider can enhance your Group Term Life Insurance and help you and the people you love find peace of mind. Flexible and available at a price designed to fit your budget, the Chronic Illness Rider offers you protection in two ways:

  1. It helps you manage the expense of a chronic illness and gives you the security and value of Group Term Life Insurance. It does so by simply offering a tax-free acceleration of a portion of your Group Term Life Insurance policy’s death benefit in the event the insured becomes permanently chronically ill.
  2. By adding this rider, you are protected in the event you do need the benefit. And if you don't need it, you still have the death benefit protection.

Because you don’t have to submit receipts or a plan of care for reimbursement, the Chronic Illness Rider gives you the power to use benefits however you like. Benefits can be used at your discretion alone.

Chronic Disease: Learn the facts.

Remember, if you or someone you love is managing an illness that requires extended care, you're not alone. Consider these facts:

A recent analysis indicates that 56% of Americans turning 65 are projected to develop serious long-term services and supports needs, and 45% will require some paid care during their lifetime.1

Some 13 million Americans are projected to have Alzheimer’s dementia by 2050. Health and long-term care costs for people living with dementia are projected to reach nearly $1 trillion in 2050.2

Women who reach age 65 are expected to live 2.5 years longer than men and spend twice as many years in a disabled state compared to men. Female caregivers often face career interruptions due to caregiving responsibilities, leading to lower earnings and reduced retirement savings. A recent study by Nationwide found that 67% of female investors reported caregiving affected their careers, with 18% unable to save for retirement at all.3

The national median cost for a private room in a nursing home is approximately $10,104 per month, totaling about $121,248 annually.4 Even if you're young and healthy—with a strong support system and enough money set aside—you can never be sure what the future will hold.

So what’s next?

Check with your group plan administrator to see if your association offers a Chronic Illness Rider that can be added to your Group Term Life Insurance. It's a  valuable way to help protect your family by enhancing insurance you already have.

NOTE TO CLIENTS

The following disclosure must be added to all Chronic Illness Rider Marketing Materials:

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.

1“Most Americans Will Need Long-Term Services and Supports in Their Lifetimes; Many Will Face Economic Hardship as a Result,” AARP, March 28, 2024.

2“2024 Alzheimer’s Disease Facts and Figures,” Alzheimer’s Association, 2024.

3“Why Saving for Retirement Is Harder for Women Than You Might Think,” Investopedia, April 9, 2025.

4“Understanding Nursing Home Costs by State 2024,” SeniorSite, 2024.

 

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