Life Cover - Elevating Financial Worries

Most people hope to live to a ripe old age but it's a sad fact that death can strike, unexpectedly, at any time. It can be a tragedy when someone dies suddenly, especially if they leave loved ones behind. If there are financial worries this will only add to the grief. A life cover policy can help to provide financial security by paying out a lump sum amount on death.

Life cover policies will usually pay out a lump sum if the person covered is diagnosed with a terminal illness (an incurable illness where life expectancy, in the opinion of the provider's Chief Medical Officer, is less than 12 months). This is known as terminal illness benefit and is, in effect, an advance payment of the full amount that would be payable on death. Claims for this benefit can't be made in the last 18 months of the policy term. Following a payment of terminal illness benefit, the policy will end and no further payments will be made.

If someone knows that they only have a very short time to live, they may be able to make good use of a lump sum. It could be used to pay for medical treatment or care that is not available on the NHS. There may be a need to make alterations to the family home or for specialist equipment. Alternatively, the money could fund a special ‘last' holiday, break or family reunion. Some people may decide to use a payment of terminal illness benefit to pay off their mortgage or other debts. Others will want to make financial gifts to their loved ones.

Of course, not everyone will want or need to do any of these things and many, with advanced terminal illness, will be extremely unwell and possibly unable to make their own decisions. In any case the funds may prove invaluable at a time when they are likely to be unable to work.

Terminal illness benefit therefore provides an opportunity for a terminally ill person to deal with the proceeds of their own life cover policy. It may be comforting for them to be able to put some of their financial affairs in order and make provisions for their families, supporting them at a difficult and sad time. Anyone considering taking out a life cover policy should make sure that it includes terminal illness benefit.