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Taking life insurance early?

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?

Comments

  • dunstonh
    dunstonh Posts: 119,883 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    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.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • 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.
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