To amend the Internal Revenue Code of 1986 with respect to the tax treatment of payments under life insurance contracts to terminally ill individuals.

[AI summary unavailable — showing source text] Amends the Internal Revenue Code to provide that payment under a life insurance contract to an insured who is terminally ill be treated as a death benefit, making such payment eligible for tax exclusion from gross income. Provides that any reference to life insurance shall be treated as referring to a qualified terminal illness rider. Provides for the tax treatment of such riders. Describes such a rider as one which provides for payments to an insured upon the insured's becoming terminally ill.…