Life cover will pay out a lump sum on death or diagnosis of a terminal illness, provided the policy terms and conditions are met. This cover becomes even more valuable to those who are incapable of working as the result of illness or injury. Unfortunately, this will have a big impact on their income and they may have to rely on State benefits or even be forced to dip into their savings. They could decide that they can’t afford to continue paying for their life cover and cancel the policies.
If someone cancels a policy, they may find that they are unable to get replacement cover in the future. Even if they can take out another policy, the cover may cost more or be subject to exclusions. The cost of life cover increases with age and a history of serious illness or injury may also require a higher premium. It therefore makes very good sense not to cancel a life cover policy during a period of long-term illness or injury.
It is possible to add, for an extra charge, a benefit that will keep the premiums going during a period of long-term illness or accidental injury. This benefit must be added from the start of the policy and is available to those below a certain age, set by the provider, who are in good health and don’t work in a high-risk occupation. The insured person can claim the benefit if the illness or injury has stopped them from working for more than a certain period, typically six months. The provider will keep the premiums going until the person recovers.
But what about those who suffer illness or injury when they aren’t in full-time employment? Well, this benefit can also apply to them. They can usually claim the benefit if they are ill or injured and are unable, six months after the start of the illness or injury, to perform a number of basic, everyday tasks.
So, anyone considering taking out a life cover policy, will need to decide whether to include this valuable benefit. It is comforting to know that no premiums will be collected at a time of long-term incapacity and that the policy can continue to provide financial peace of mind.
It’s always sensible to read the terms and conditions, before starting a policy, to ensure that the cover meets all requirements.