Brits have been urged to check their life insurance policy, as millions of holders are unaware of a financial safety net that could support them during difficult times. According to research, millions of policyholders are unaware that many life insurance policies include terminal illness benefits.
This benefit allows you to access early payouts if you receive a terminal diagnosis, which could make a huge difference to families during challenging times.
According to MoneySuperMarket, while the definition of a “terminal illness” may vary by policy, in most cases it is where life expectancy is less than 12 months.
This could help families with a number of things, including mortgage payments, childcare, and other household bills. However, it is important to note that once your insurer pays the terminal illness benefit, the life insurance policy will end, meaning beneficiaries will not receive an additional payout following the holder’s death.
The two main things to do are review your documents and keep an eye out for “Terminal Illness Benefit” in the schedule. Then you’ll want to speak to your insurer or adviser.
MoneySuperMarket found that only one in two policyholders is aware that some life insurance policies allow early payouts, and therefore, it is really worth checking it out.
Terminal illness benefits are typically included with term life and whole-of-life policies, but again, it’s always best to refer to your comments and speak to your insurer to find out whether it applies to you.
Being aware of this information can dramatically help families without the added stress that money can bring.