Critical illness cover and Life Insurance

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Megan
Macmillan's Online Community team

Hello @Leafygreen,

Thanks for getting in touch.

If you have two separate policies you could look to claim on both. It sounds like the life insurance policy for 114K may have a terminal illness clause which would allow an early claim if a prognosis of less than 12 months has been given.

The other life insurance may have a terminal illness clause too, but if it also has critical illness cover you should be able to claim if you have been diagnosed with a serious condition covered by the policy. Often if it’s a combined life and critical illness policy, it will be paid out on a first event basis, meaning the policy will cease once a claim has been made. Sometimes combined policies have a ‘buyback’ option, this means you can buy back the life insurance cover in the event of a successful critical illness claim. Please check your terms and conditions to see how the policy is set up and if there are any additional features like buyback.

I can understand why you might be apprehensive about the claims process and the time involved. It can take a number of weeks for a claim to be looked at and during this time, the insurer will be assessing whether the cancer meets their criteria of a critical illness or terminal illness. They will also look at the information given at the time the insurance policy was taken out to make sure it was all accurate.

Delays can sometimes be due to medical reports taking time to be returned. If you do decide to make a claim under either policy it might be worth chasing your medical team to try speed things along.

We wouldn’t be able to say how many claims are paid out by this company as this isn’t information we have access to. What I would say is your insurer should keep you up to date throughout the process and if the claim was unsuccessful, they will send you a decline letter outlining the reasons why. If this were to happen for any reason, I would suggest giving us a call on the number below so we can have a look at this in more detail for you.

There are other things you might want to consider before making a claim such as:

• Some policies pay out a lower amount on terminal illness claims than they would do if the person died. So, it’s important to check with the insurer how much they would pay out on terminal illness and if this would be different to a claim on death.
• It’s important to continue paying the premiums until the claim is agreed.
• Some policies do not allow a terminal illness claim if the policy is due to end within a specific time frame (often 18 months).
• Claiming on an insurance policy may affect means tested benefits, so it’s important to check this with a benefits adviser first.
• It’s important to consider whether claiming on a life policy early, might create, or increase an Inheritance Tax liability.

If you’d like to talk through this some more, feel free to phone us so we can chat about your individual circumstances on 0808 808 0000 – Mon-Fri 8am-6pm.

Calum

Financial Guide

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