Life Insurance typically includes terminal illness, however it may not be included in all plans but if it is there may be different parameters. A terminal illness is defined as an illness which is rapidly continuing through your body perhaps and that in the eyes of a consultant would expect you to die within twelve of analysis of the illness and therefore would need to be within the end of the term of your policy. The latest the term of the policy could typically take you up to your eighty fifth birthday. If you were to die before the term of your policy ended then the money would be paid out to your next of kin, but if the policy was put into trust then the benefit would be paid out to the appointed trustees of the plan stated. The way an insurance plan is set up under trust is once the plan has been activated, you would complete a trust form from the specific provider the insurance has been taken out with. Some trust forms may seem very daunting and hard to complete however there may be a guide to trusts which explains step by step how to complete.
Many people ask if they are covered whist the application is being submitted and looked at by the provider. For some this is not an area which is of concern as some providers depending on their health will give an automatic decision, however if a plan is taking weeks or months to underwrite there may be a concern as to what would happen if they pass away or if a critical illness insurance is taken out, what would happen if they were to be diagnosed with one. Some providers offer Temporary Cover or what is called Free Cover until the plan commences however this is not the case for all insurance providers, and should be looked into carefully if this a benefit you require. The companies that do provide such cover would pay out the sum assured you are applying for if under the amount of five hundred thousand.
Level, Increasing or Decreasing cover. These are the choice of cover which you can select when purchasing one of the available insurances in the financial industry. If choosing level cover this is in regards to the lump sum or assured you take out at the start of the plan, whether that is fifty thousand or a hundred thousand etc. No matter what level of cover you set out with, if a claim is put forward and a senior underwriter approves the claim the benefit will be paid out. Where as if choosing a decreasing sum assured, which would tend to be cheaper than buying a level insurance plan, the sum assured will get lower throughout the term of the plan. The sum assured decreases on an annually on the same day every year on which the policy first commenced. The level it decreases by is determined by the rate of which was agreed and can be seen on your policy summary or quotation. If for what ever reason you cannot find your policy documentation, if you have moved house or misplaced it then all you would need to do is contact your provider and they will be able to help you with any questions and give you the information you need. The sum assured would tend to be in line with any outstanding debt, if the plan was to cover your mortgage then it would need to be calculated in line with your repayments so you were never short if you were to die or make a claim under a critical illness policy. The other option is to take a plan out on an increasing basis so that it goes up annually again on the anniversary of the plan, so that it keeps inline with the RPI (Retail Price Index). Therefore the plan will compensate for the constant rise in inflation. The provider will keep you up to date with your plans, telling you exactly how much the sum assured is and what you are paying, because if chosen an increasing plan then the price of the plan will also increase annually.
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