Terminal Illness Insurance is a form of insurance that can be added to a regular life insurance policy but is not available as a separate insurance policy. When life insurance holders take out the additional terminal illness cover they have the peace of mind of knowing that if they were to be diagnosed with a serious illness and expected to die within 12 months, the combined policy comprising the life cover plus the terminal illness cover, will be paid out immediately rather than having to wait until death occurred, as would have to happen if the terminal illness cover had not been taken out.
Terminal illness insurance is different completely from critical illness insurance but is sometimes confused by those seeking appropriate cover. Critical illness cover is a ‘stand alone’ life insurance product where the insurer agrees to make a lump sum cash payment if the insured is diagnosed with any one of the critical illnesses listed in the policy document. Such cover may be structured to pay out certain sums such as replacing a regular income and it may be made subject to the insured having to undertake a certain surgical procedure such as having a heart bypass operation. It may also be conditional on the insured surviving a minimum number of days from when first diagnosed, this is usually from 20 to 30 days.
Terminal Illness Life Insurance
Most life insurance policies can have a terminal illness clause included that will not attract any additional costs.
Knowing the difference between terminal and critical illness is necessary for you to be able to make the right decision when considering your life insurance policies and the various options you have. Most life insurance companies have two distinct policies but customers will sometimes ask for a quote on an extended coverage. Most life insurance policies can have a terminal illness clause included that will not attract any additional costs. Critical illness cover is also different in that it will pay out on blindness and heart attacks where terminal cover will not. If you feel you want to cover yourself for such an event occurring you must be certain that you take out critical illness insurance as a separate insurance policy to enable you to be paid out the agreed amount for such things as living expenses, medical costs etc.
Honesty is the best policy
When applying for life insurance the insurance company will factor in your age, health employment, environment, activities etc in order to be able to arrive at the correct premium for you to pay. It is vitally important that you be extremely honest in answering all these questions as if you fudge any area at all it could mean that when the time comes to make a claim it will be declined because of some earlier dishonesty.
Most life insurance companies use similar guidelines in arriving at the correct premium to charge you for basic life insurance and any additional benefits you might want to add, such as terminal illness cover. For this reason you should be wary if a company offers you a rate that is much cheaper than the others. High risk policy holders will have to pay more than a policy holder who is considered a low risk and it might be that a certain quote might be lower than another because some questions were answered differently. In this case you might finish up paying all your premiums diligently over many years, only to find when the time finally arrives that you have reason to make a claim, your claim not being approved because of you not being entirely honest when making application many years ago.
If you smoke or have smoked in the past be honest about it.
The high risk category of policy holders will include people who have some hereditary illness history in their family background, if this is denied when you make application for cover it will become obvious if you, in later years, happen to contract that illness. If you smoke or have smoked in the past be honest about it even if you have ceased at the time of applying for the insurance, as it will come out if you were to be diagnosed with emphysema in later years. If you are a miner or have worked in a stone quarry you must say so in case 30 or 40 years into the future you come down with silicosis. Your recreational activities are equally important as is your right age.
Few life insurance policy premiums increase over time therefore the price you pay for the policy taken out now will last for the term of the policy. Bargains may only be short term advantages anyway as ongoing inflation will lower its costs over time. If you smoke your premiums will be affected so you will have to live with it, especially as most companies simply ask, ‘have you used tobacco during the last 12 months’. If you answer ‘yes’ they will see this as a potential threat to your life and your premium will be increased.