Life cover benefits can be at risk of terminal illness

Good advice and recommendations can avoid this risk, so what are the options available?

1. Increase the recommended life cover sum insured by the assessed likely financial implications of terminal illness; and or
2. Increase stand-alone trauma cover (most stand-alone trauma products now include terminal illness as a condition) to a sum insured as necessary; and/or
3. Add separate insurance cover for terminal illness only.

Terminal Illness, which often generates its own expenses and loss, is a financial risk separate from death for people and should be treated as such (even if actuaries and underwriters don’t). 

However:

• Increasing trauma cover sum insured to cover terminal illness is not ideal because prior trauma claims could reduce trauma cover to zero long before terminal illness.
  
  While the proliferation of options to allow buy-back of trauma cover multiple times may reduce this risk, covering terminal illness risk with trauma cover or even severe trauma cover, is very cost inefficient because trauma covers costs much more than terminal illness cover.
   
• Adding life cover sum insured is also an expensive way of covering terminal illness because premiums include the cost of nice-to-have but unnecessary, death benefits.

Terminal illness cover may be the solution