Saturday, 23 March 2019

Making Cents: Terminal illness benefit can help at a stressful time

Terminal illness is one of life’s tragedies, but it is also a fact of life for thousands each year, says Grainne McGuinness.

Financial providers believe many Irish people are not fully aware of all the help available to them. While money will not fix a terminal diagnosis, financial worries can add considerable extra strain to already devastated households.

After doing some analysis of its most recent claims figures, Irish Life wants people to be more aware of the possibility of terminal illness benefit. Its data highlights low levels of Irish people claiming these benefits. Out of over 1,000 death claims, only 3% of people claimed a terminal illness benefit while they were still alive.

“The number of people in Ireland making claims while they are terminally ill is very low,” Martin Duffy, head of underwriting and protection claims, Irish Life, said. “For example, of the death claims paid by Irish Life in the first six months of this year, almost half (44%) were for malignant cancer, and many of these would have been a terminal condition long before the person unfortunately passed away.

“This would suggest that a substantially higher number of people could be claiming terminal illness benefit while the condition was in this phase. So we’re trying to raise greater awareness among people, and their families, that they could be eligible to get a life insurance pre-payment now.

People who are terminally ill, from any medical condition, may find that receiving a life insurance pre-payment while they’re alive significantly reduces financial worry at an extremely difficult and stressful time for them and their families.

This benefit is not restricted to Irish Life. All major Irish providers offer terminal illness benefit, although not necessarily on all policies. Experts in the field agree that Irish figures are low.

“Many companies in the UK are now seeing up to 20% of life claims being paid out as terminal illness whereas in Ireland I’d be surprised if even 5% of any Irish insurers claims are paid as terminal illness,” an actuary at a major reinsurer said. “This is surprising, as it’s the exact same terminal illness definition used in UK and Ireland and terminal illness has been a product feature in Ireland for a similar amount of time as the UK.

“It’s not as if Irish insurers are declining terminal illness claims it’s just that they are not seeing requests for a benefit to be paid out under the terminal illness option at all.”

Criteria will vary among providers but in general a terminal illness is a condition that, in the opinion of an appropriate hospital consultant, has no known cure, or has progressed to a point where it cannot be cured, and where the illness is expected to lead to death within 12 months.

Financial adviser Nick McGowan of explains that the criteria can lead to some complications.

“It’s a valuable benefit, but one that can be difficult to claim successfully on because of the difficulty of satisfying the “no greater than 12 months” condition,” he said. “Within the medical context, the phrase ‘terminally ill’ is used where the likelihood of survival is less than three months. Unless the consultant firmly believes that their patient is likely to die within, say, three months, they will generally avoid any prediction of life expectancy. In fact, a consultant is likely to be over-optimistic to support their patient. That puts them in the awful position where their patient asks them to help them out by completing a life insurance report stating they have less than 12 months to live allowing them to sort out their financial affairs before they go.”

But he adds that it can still be a valuable help to patients and their families, and he would like people to be more aware of it.

Mr Duffy also pointed out another benefit, namely that paying out before death means not needing to go through probate to access the funds. This is undoubtedly useful for families who want access to funds for the ill person’s final months, but may also have consequences for any inheritance tax planning that has been done. For this reason, it is advisable to discuss any move with an independent adviser.


Virgin Mobile have launched what it describes as ‘Ireland’s most generous and transparent mobile offering’ to all Virgin Media customers who sign up to its Unlimited SIM Only plan.

The plan includes unlimited 4G data, calls and texts on a 30-day contact. To entice customers to switch, the company is offering the plan free for the first three months. It is are keen to promote transparency as a cornerstone of its dealings with customers.

“We all know the mobile industry is rife with hidden terms and conditions but that’s not the case at Virgin Mobile,” said senior manager Anne O ‘Flynn. “This new offer highlights Virgin Media’s commitment to our existing cable and broadband customers.”

“With our freestyle phone contracts, customers can also upgrade their phone whenever they want. We’ll make it absolutely clear when their phone is paid off and we’ll never lock their phone to our network.”



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