How does Terminal illness cover work?
At Future Proof, we arrange life insurance policies that include the benefit of Terminal Illness Cover. The benefit is designed to pay out a lump sum when the policyholder dies or is diagnosed with a terminal illness (where life expectancy is less than 12 months), during the term of the policy.
There have been a number of media stories where applicants have not received the Terminal Illness payment because they were deemed not terminal ‘enough’.
It is a difficult subject to broach and Insurance providers are reliant on medical specialists to provide confirmation of a terminal diagnosis.
We have recently had such a case.
Our Client
We were contacted in 2017 by Mr C, who was aged 67 at the time. He wanted a life insurance policy to provide financial security for his wife.
We arranged a level term life insurance policy for him offering a sum assured of £10,000 until his 90th birthday at a monthly cost of £14.63.
A Terminal diagnosis
In January 2020, he called us to advise that sadly he had been diagnosed with terminal cancer, and we started the claims process with the insurer on his behalf. The provider requested confirmation of the diagnosis from his Consultant, plus copies of his medical records which can take a few weeks.
His claim was accepted and £10,000 was paid out to him in April 2020.
We were saddened to hear that Mr C passed away in September 2021 – some 17 months after the terminal illness payment was issued.
What happens if you outlive the 12 months?
Clients often ask what would happen should the claimant live beyond 12 months? – nothing, this does not make any difference and once the Terminal Illness payment has been made, the case is closed.
Client: 115010236
Next steps
Whilst you are welcome to get a quote online, we would recommend you speak to one of our advisers.
Any quote that your adviser provides you with will take into account your circumstances and medical history, as well as your budget!
An online quote is just that – a quote – it isn’t a definite offer of cover. What really matters is the premium you are offered, after your application has been assessed.
Call Freephone 0800 644 4468 – Monday to Thursday from 09.00 to 19.00 and on Friday between 09.00 and 17.00
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Interested in related stories?
Jon’s moving story – being diagnosed with cancer
How much life insurance do I need?
The protection industry pays out over £5.7bn in claims in 2019
The protection industry pays out £6.2bn on 2020 claims
What questions will an adviser ask me?
Why you can trust Future Proof.
The benefits of an index-linked insurance policy
Take a look at our handy guides ‘What Cover is Right for me?’
Do you suffer from a medical condition and are concerned you can’t secure Life Insurance? Please view our ‘Medical Guides’ for further information.
Whilst we will make every endeavour to help someone to arrange insurance, there is no guarantee of success. All applications are subject to underwriting.
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