Taking life insurance early?

UKSBD

If someone has life insurance for £100,000 and they have a terminal illness, will the insurance company pay out early?


If so, I assume they reduce payments and if so, by how much?

dunstonh

If someone has life insurance for £100,000 and they have a terminal illness, will the insurance company pay out early?

If there is terminal illness cover on the policy then yes they will. On older plans this may not exist or may have been an optional extra. On more recent plans, this is often included as standard.

If so, I assume they reduce payments and if so, by how much?

they dont.

Chris_Pollard

UKSBD, check your terms and conditions, or call the insurer. Some insurers may not have an explicit "terminal illness" clause within their contract, but that won't necessarily prevent them from considering making an ex gratia offer. If they do this they may make an adjustment to the benefit paid, but it would clearly be something that would require your agreement. If this is the case, I recommend you take expert financial advise. Such a non contractual payment could give rise to tax liabilities that might otherwise not be incurred.

Hope this helps.