What is terminal illness cover and how could it help?

Terminal illness cover (or terminal illness benefit) allows you to make an early claim on your life insurance if you’re diagnosed with an illness and predicated to pass away within 12 months.

This pay out can help to ease financial stress and give you peace of mind that your affairs are in order.

Once a successful claim has been made the policy expires and no further claims can be made after the policyholder dies.

At Reassured, all term life insurance policies we arrange come with terminal illness cover as standard.

So not only can we find you a great deal on your life insurance, but you can have peace of mind knowing that this benefit will be included at no extra cost.

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What is a terminal illness?

With regards to life insurance, a terminal illness refers to a condition that can't be cured and is predicted to result in death within 12 months.

Typically, this includes:

Terminal illness list

The list of illnesses covered by terminal illness cover will vary between insurers.

Their definitions of each illness may also differ so it’s important to know what you are (and aren’t) covered for.

At Reassured our award-winning team can take you through the whole process of obtaining life insurance to ensure you get the right cover that meets your needs.

What is the difference between terminal illness and critical illness?

Whilst the two terms are commonly used interchangeably, terminal illness and critical illness are actually two different types of cover.

Critical illness cover provides a lump sum pay out if you're diagnosed with a life-changing, yet not terminal, illness.

Cover comes at an additional cost and can be purchased as part of a life insurance policy or as a standalone product from some providers.

Whereas terminal illness cover allows you to access your life insurance payout early if you're diagnosed with a terminal illness.

Terminal illness cover Critical illness cover
Usually free of charge with a term life insurance policy Can be added to a life insurance policy for an extra cost
Cannot be purchased by itself Can be purchased as a standalone product from some providers (not available through Reassured)
Once you’ve made a claim, cover expires (including life insurance) Making a critical illness claim won't affect a separate life insurance policy, but may affect a life insurance policy that was taken out with critical illness added (depending on your policy terms)

If you want more detail on how these two cover elements differ, see our dedicated terminal illness vs critical illness »

Benefits of terminal illness cover

Whilst claiming on your terminal illness cover will end your life insurance cover, it can provide reassuring peace of mind at an already difficult time.

The pay out could be used to help:

  • Replace a salary
  • Pay for a home carer
  • Fund necessary adaptions to your home
  • Provide peace of mind regarding your family’s financial future
  • Clear any outstanding debts
  • Cover your funeral costs
  • Enjoy your remaining days with your loved ones

The cost of terminal illness cover

As mentioned, most term life insurance policies now include terminal illness cover as standard.

Therefore, you're able to benefit from this added protection at no extra cost.

Typically, this includes:

  • Advanced stages of cancer
  • Leukaemia
  • Heart disease/failure
  • Severe coronary artery disease
  • AIDs
  • Kidney disease
  • Liver disease
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Smoking and terminal illness cover

With regards to life insurance applicants, whether you smoke or not is a hugely influential factor.

This is because of the health implications associated with smoking, which can greatly increase the likelihood of a claim.

As a result, life insurance with terminal illness cover premiums will be significantly higher than that of a non-smoker.

Making a terminal illness cover claim

Upon diagnosis of a terminal illness, if you're predicted as having less than 12 months to live, it's possible to claim early on your life insurance.

Your insurer is likely to require proof of your condition from a medical professional. In some instances, they may also request a further examination from a consultant.

It may not be possible to make a claim if your policy has less than 12 months before it expires.

Lastly, if you have decreasing term cover, the terminal illness benefit reduces over the policy term.

Joint terminal illness cover

Where a joint life insurance policy is concerned, the terminal illness cover is also joint.

As a result, if one policyholder makes an early claim on the policy, the cover will expire and the other partner will be left unprotected.

Whilst joint cover only offers one payout, the cover is approximately 25%-30% cheaper compared with that of two separate policies.

However, two single policies could result in two separate pay outs and potentially double the coverage.

Can someone with a terminal illness get life insurance?

Unfortunately, most life insurance policies require you to provide medical information when applying for cover.

This information is then used to determine the likelihood of a claim being made.

As this is a certainty if the policyholder is suffering a terminal condition, the application will be declined.

However, if aged between 50-85 there's still another option.

An over 50s plan provides guaranteed acceptance to all UK residents within this age range, without the need to provide any medical information.

The one caveat, however, is that over 50s plans include a waiting period (usually between 12-24 months) which the policyholder must survive before a pay out will be made.

If the policyholder passes away before this period, the premiums made into the policy will be refunded but no lump sum pay out will be issued.

Living with a terminal illness

If you, or a loved one, have been diagnosed with a terminal illness you can find help and support here:

Get the right life insurance cover for you

As discussed, at Reassured all term life insurance policies come with terminal illness cover included as standard.

However, the cost of premiums and the type of cover can vary significantly between insurers.

As a result, to secure the very best price we can offer, it's important to compare multiple quotes.

We can do some of this work for you by sourcing quotes from the UK’s leading insurers for you to compare, helping you find a cost-effective policy.

And our award-winning life insurance brokerage is fee-free to use.

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