What is Terminal Illness Insurance?
Most life insurance policies (which are commonly used to protect people’s mortgages or to protect their families) include a benefit known as terminal illness cover. This means that a policy which includes terminal illness benefit will pay out the sum assured if the policy holder is diagnosed with a terminal illness as defined by the insurance company.
Insurers define a terminal illness as being told by the relevant medical professional that you have a life expectancy of less than 12 months.
Watch Out for the Small Print
As Independent Advisers, one of our roles is to differentiate between one insurer’s product and another. Upon carrying out research around the terminal illness benefit included in these products, we found out the importance of reading the small print.
We work with at least ten insurers who offer life cover with a terminal illness benefit, six insurers will pay out if the diagnosis is made at any stage during the policy (even if it was in the last week of the policy’s term). However the remaining four insurers will not pay a terminal illness claim if diagnosed in the last 12 months of the policy’s term*.
Does your policy include terminal illness Insurance?
Firstly check your policy documents to understand the terms and conditions for your policy. If you are unclear, it may well be worth calling your insurance company for clarification. If you are unhappy with the explanation, the next stop could be to call an independent specialist who should be able to explain the terminal illness terms and conditions for your insurance company. We offer expert advice free of charge to all our customers, please call us 0800 644 4468 to speak to one of our award-winning advisers.
If you are thinking about reviewing your life insurance policy, or if you are thinking about taking out a new life policy, ask the question about terminal illness cover, and whether you will be covered until the end of the term. It may seem like a small point, unless you are unfortunate enough to be in this situation, when of course it will be a massive point.
If you feel it is important that terminal illness is covered for the full term of the policy, make sure you check the small print or get advice from an independent adviser.
If you are interested in arranging an Income Protection, Life Insurance or a Critical illness policy and would like some friendly and expert advice, please call one of our expert advisers on FREEPHONE 0800 644 4468.
We are here to help you between 09.00 and 19.00 Monday to Thursday and 09.00 to 17.00 on Friday.
*The information regarding insurer’s terminal illness cover was sourced from the current Key Features brochures of: Aegon, AIG Life, Aviva, Legal & General, LV, Old Mutual Wealth, Royal London, Scottish Widows, Vitality Life and Zurich during May 2017.