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Which insurers help clients with life limiting illnesses?

Which insurers help clients with life limiting illnesses?

“Life is for living,” we often hear. Or “you’re a long time dead.” The point of these fairly blunt sayings is, of course, to ensure that instead of looking over our shoulders in constant fear of the Grim Reaper, we just get on and enjoy life.

However, for advisers, helping clients get the most out of life only makes sense in the context that one day, they will pass away. Just as it’s impossible to experience day without the contrast of night, it’s impossible to plan for life without acknowledging death.

Life insurance is perhaps the simplest way of doing this as part of a financial plan. People can understand the concept of paying a monthly premium in return for a lump sum benefit that is payable upon death. But what they may not understand is that their life insurance policy also has another layer of cover which pays out if they are diagnosed with a terminal illness.

In this insight we look at how providers offer terminal illness cover, with particular attention to the differences between them

Terminal illness cover will only pay out if the client is diagnosed with an illness that doctors confirm will eventually lead to death.  Definitions of a terminal illness can vary, but all insurers refer to an incurable condition where medical professionals expect someone to live for no more than 12 months as a result of their condition. Cancer or heart disease that has reached an advanced stage are examples of conditions that can be terminal.

Nobody wants to contemplate being in this position but given life’s tendency to throw everyone into a lottery in many respects – whether it’s the chance of finding a lifelong partner or developing a critical illness – it is something that shouldn’t be skirted over. And although terminal illness is hardly a positive, being more aware of the time they have left does enable terminally ill people to prepare and have more of a say in how they pass away.

If some way down the line a client does receives the devastating news that they do not have long to live, coming to terms with that is bound to be tough but their responses may vary. Some clients will take it on the chin and perhaps be relieved that they can see an end to their pain and suffering. Others might feel fear, anger and intense sadness as the implications of not being around to see children in the family grow up, for example, become clear.

Whatever the individual’s circumstances and how they are dealing with them, a terminal illness benefit can help to make a client’s final days better. Local newspapers and consumer magazines are full of stories where terminally ill parents are able to see their children get married before they die, or perhaps do that one final thing they have always wanted to do and never got around to doing. Money will not be able to stop the terminal illness in its tracks, but it can make a huge difference to those final moments.

All insurers provide terminal illness cover as standard on their life policies. In other words, clients do not have to pay an additional premium to be able to claim on it, which can only be a good thing for clients. Pricing any form of cover as an optional extra will always focus clients’ minds on costs and whether they would rather pay a lower premium, rather than having it ‘just in case’ it is needed. The fact that all providers structure terminal illness cover this way shows that this is most likely the best way to make it accessible.

Terminal illness cover is provided by all insurers for as long as the main insurance contract is in place. Again, this is in the interests of the client as they benefit from this extra level of protection the whole way through, which also keeps the product simple. It is much easier for clients to understand that the terminal illness cover will expire along with the life cover than having two different expiry dates for each element.

Similarly, there is consistency between the maximum ages at expiry for the terminal illness cover and the life cover of which it is a part. Again, having the same maximum age criteria for both elements makes it easier for advisers to explain to clients and also simplifies issues of suitability. Imagine the complications for advisers if they had to explain that a client was too old for one of the elements but well within the age criteria for the other element.

For most insurers you could not put a cigarette paper between their terminal illness cover in terms of coverage. However, this changes when we look at whether certain terminal illnesses are covered even if the client has not been given a prognosis of less than 12 months to live.

Guardian go above and beyond other insurers by covering Stage 4 cancer, Motor Neurone Disease, Parkinson-Plus Syndrome and Creutzfeldt-Jakob Disease within their terminal illness cover even if the client has not been given a prognosis of less than 12 months to live.

Whilst being diagnosed with these conditions may not lead to death within 12 months, they will have a severe impact on the client’s lifestyle and longevity. The addition of these conditions within the Terminal Illness cover could therefore provide a valuable lump sum to consumers at a dire point in their lives as our panel of doctors explain:

“These are all diseases which are likely to have no cure and tend to progress at a steady rate towards death. That being said, there is still significant variation on an individualised basis with regards prognosis. For example, metastatic testicular cancer has a 5-year survival rate of around 80%, whereas in pancreatic cancer, the average survival time is only 2-6 months.

“Motor neurone disease (MND) is regarded as a devastating neurological condition, which usually follows a relentlessly progressive deterioration in the muscles of the limbs, spine and those involved with swallowing and breathing. This often results in death through lung failure and pneumonia from aspirating food and liquid from swallow issues. The disease can still be highly variable in terms of symptoms and time course. The most common form of MND, has a median survival of 3-5 years from diagnosis, although it is reported that 10% can survive up to 10 years.

“Parkinson-plus syndromes is another neurological disorder which does not respond to treatment and has a poor prognosis. They are often associated with early onset dementia, significant disability and confinement to bed or wheelchair is typically necessary late in the disease.

“CJD is a rare, degenerative brain disease with no curative treatment and results in rapid progression of dementia, leading suffers to be unable to care for themselves within a short period. In the early stages, along with memory and behavioural issues, there are coordination and eyesight problems. Eventually, people lose the ability to move and speak and then enter into a coma. About 70% of individuals die within one year of diagnosis.”

It is worth noting that if a client has a Critical illness policy, the four conditions mentioned above would result in a full pay-out for the client under most plans.

It does highlight however, that Guardian have extended the cover available under their life plans to include four severe, uncurable and degenerative illnesses that will have a monumental effect on a client’s standard of living without necessarily leading to death within 12 months.

This extra layer of protection offered by Guardian makes them market leaders for Terminal Illness Cover at this time.

About The Author


As well as writing for Protection Guru, Amanda Newman Smith is the feature writer at adviser trade publication Money Marketing. She started her career at a local newspaper in London and has been writing about protection products since 2000. In her previous role at Money Marketing she specialised in analysis of new financial products, including those in the protection market. Having recently become interested in antiques, Amanda spends her free time with her husband and their three children, hunting for unloved pieces to restore to their former glory.

1 Comment

  1. Ruth Gilbert, Insuring Change

    “All insurers include terminal illness as standard within Term Assurance and Critical Illness policies. ”
    Not quite. eg SW’s standalone CI doesn’t include TI, and in the non-advised market some Life cover policies don’t cover TI.


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