Being given a prognosis of having just months to live must be a desperate time. Not only does someone need to manage their own emotions, they will also see the impact of their situation on their loved ones. At times like these, clients may want to organise their financial affairs in order to be as comfortable as possible in their last days. Being able to claim on a life policy in such scenarios can make a massive difference. This week, we explore Terminal Illness Cover in more detail to examine how terms differ from provider to provider.

A terminal illness is generally defined by satisfying both of the following:

  • The illness either has no known cure or has progressed to the point where it cannot be cured;
  • In the opinion of the attending consultant, the illness is expected to lead to death within 12 months.

All insurers include terminal illness as standard within Term Assurance and Critical Illness policies. However, not all providers will offer this cover throughout the whole policy term, with some insurers excluding Terminal Illness claims within the last 12 months of their life only contracts. The chart below shows when different providers end their cover:

Those that do not exclude Terminal Illness claims in the last 12 months of the plan are clearly more beneficial. Where an insurer has this exclusion, a client must be expected to die within the policy term. On the other hand, insurers that do not include this exclusion could potentially be paying claims to clients that are expected to die outside of the policy term (i.e. a client could be given a prognosis of six months to live on the last day of the plan and still claim).

At present it is very difficult for the medical profession to accurately predict the longevity of a client with an uncurable and degenerative condition. Many factors must be taken into account, however new technology may help give more accurate indications in the future which could lead to more terminal illness claims in the future, as our panel of doctors explain:

“There is vast variability of prognosis between individuals, as there are frequently differences caused by other factors. These include; age, gender, additional health conditions and general health. Certain metastatic cancers also vary prognostically to by the type involved, where it has metastasised to and molecular features. In addition, published statistical data is frequently generalised and based on historical data produced several years previously. This tends not to take into account newer available treatments which would impact on life expectancy.

“More recently, cancer and palliative care researchers are increasingly developing prognostic computer-based tools to help establish prognosis on an individualised basis. Therefore, it is currently difficult to accurately predict a 12 month or less prognosis, although this may improve with the development of easier-to-use clinical tools.”

Until recently terminal illness claims have only been applicable to the diagnosis of a terminal illness which fits the general definition. Guardian, however, take a slightly different approach. For their life protection policies, in addition to providing the standard Terminal Illness Cover, Guardian will also pay-out the full sum assured on the diagnosis of one of a selection of serious illnesses:

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. AIG, Aviva, Legal & General, Royal London, Scottish Widows, Vitality and Zurich are also highly commendable. These providers, like Guardian, enable clients to claim on Terminal Illness cover at any point in the policy term.