Terminal illness benefit in life insurance can pay the cover amount while the person insured is still alive, if they are diagnosed with an illness that meets the policy's definition. In the definitions quoted below, that means a consultant's opinion that death is expected within 12 months, and the payment ends the policy.

If you or someone close to you is living with a terminal diagnosis, Marie Curie offers free information and support online, in print and by phone on 0800 090 2309. For cancer, Macmillan's free support line, 0808 808 00 00, is open 8am to 8pm, seven days a week.

If you already hold a policy, its terms and schedule show whether this benefit is included. If you are choosing new cover and want to understand how insurers word it, you can leave a request using the form on this page, which passes it to an FCA-authorised broker; talking the wording over costs nothing.

What is terminal illness benefit, and which policies include it?

On the policies quoted here, terminal illness benefit is part of the life cover, not a separate policy: the same lump sum can be paid on a diagnosis or on death. Legal & General's direct Life Insurance terms (QGI12849, October 2026) say: "Life insurance will pay a lump sum if the life insured dies or is diagnosed with a terminal illness during the term of this policy. If this happens, your policy will then end." Aviva and Royal London word it in similar terms:

  • Aviva's Life Insurance Plan key facts (DA03008, May 2023, linked from aviva.co.uk) say: "Our Life Insurance Plan provides life cover and terminal illness cover."
  • Royal London's direct terms and conditions (code D2C TTC 1223139355) say: "This policy will pay out a single cash sum if you die or are diagnosed with a terminal illness before the end of the policy term."

Whole of life cover can include it too. Zurich's Whole of Life key features (PW720505007, February 2025, an adviser-site document) say the policy "will provide you with Life Cover that pays your chosen cover amount when you die or are diagnosed with a terminal illness."

If you are weighing up cover for a parent who is unwell, life insurance for parents sets out what to ask an insurer. Income protection pays on different events, as the other critical illness and income guides explain.

How do insurers define terminal illness?

Each insurer words its test differently, and the wording decides who qualifies. Legal & General's terms (QGI12849, October 2026) say:

Terminal illness is defined as a definite diagnosis by your hospital consultant of an illness that satisfies both of the following:

The illness either has no known cure or has progressed to the point where it cannot be cured; and

In the opinion of your hospital consultant and our Medical Officer (a qualified doctor employed by Legal & General), the illness is expected to lead to death within 12 months.

Aviva's policy conditions (DA03011, May 2023) use a similar two-part test, but the second limb refers only to the consultant: "In the opinion of the attending consultant, the illness is expected to lead to death within 12 months."

Royal London's direct terms word it from the other end: "The Consultant (a specific type of medical specialist) treating you for your terminal illness must hold the medical opinion that you have 12 months or less to live." It adds: "Our Chief Medical Officer must accept the medical opinion of the Consultant before we will pay a claim." LV= says on its website: "an incurable illness where, in the opinion of an attending consultant and our Chief Medical Officer, you would not be expected to live for more than 12 months."

Scottish Widows' Protect policy summary (61041, January 2026; the version for customers not using an aggregator, from its adviser site) leaves full details to its policy provisions and says: "If your illness has no known cure or it has reached a point where it can’t be cured, we’ll pay a claim for terminal illness. We’ll only do this if your consultant doctor thinks your death will happen within 12 months." Zurich's Life Protection key features (NP720500009, February 2025) say: "The full definitions of these conditions and the criteria to make a claim are included in the terms and conditions."

So these tests turn on a medical opinion about life expectancy, not a diagnosis alone, and some give the insurer's own doctor a say. Cover that pays on named conditions is different; see critical illness cover compared with terminal illness cover.

Is there a cut-off before the end of the term?

The current terms quoted here tie the benefit to the policy term itself. Aviva lists, among cases where it will not pay, that "you die, or are diagnosed with a terminal illness, outside the policy term". Scottish Widows says: "You must tell us about the diagnosis before the policy’s end date and the policy will end if we pay a terminal illness claim." Royal London's direct terms say it will pay "as long as that terminal illness meets our definition (see below) and your policy is in place." Legal & General's summary (QGI14786, October 2026) adds that terminal illness cover cannot be claimed "if the length of the policy is less than two years".

An older policy shows what a cut-off can look like. A Financial Ombudsman decision (DRN-5106447) quotes a past Royal London policy that paid on a terminal illness only "where diagnosis is made at least one year before the Benefit End Date". The Ombudsman found Royal London had fairly concluded the benefit was not payable, because the illness, as that policy defined it, was not diagnosed "before the last year of the policy’s 12-year term." That is one older policy in one decision, not Royal London's current terms.

Choosing a term for new cover? Whether the insurers you are considering would pay on a diagnosis close to the end date is something to check with an FCA-authorised broker, whom the form on this page will ask to contact you.

How do you claim, and what happens to the policy?

A claim goes to the insurer, using the contact details in the policy documents, not through this site. Legal & General lists what it needs for a terminal illness claim as "the illness and diagnosis". Aviva's conditions ask for "Proof that the life covered has died, or become terminally ill." Royal London sends a claim form and, if it accepts a terminal illness claim, "we’d refund any payments you’d made for your cover while we were assessing the claim."

Aviva's policy conditions say: "Once we’ve accepted a claim, the policy will end. We’ll pay the cover amount shown in the policy schedule." So the benefit is the death benefit paid early, not an extra sum on top. Legal & General puts it this way: "Terminal Illness Cover is an advanced payment of the death benefit calculated at the time the Terminal Illness definition is met. This can mean that the Terminal Illness benefit paid may be less than would have been paid at death."

On decreasing cover, Royal London's direct terms say: "If you have Decreasing cover, we’ll calculate what to pay you for a terminal illness claim using the date you met our definition. Not the date we pay the claim." Legal & General's terms say the amount payable "will be the amount of cover we calculate on the date the Terminal Illness definition is met." The cover itself is explained in decreasing term life insurance.

On a joint policy, Aviva says it "will only pay out once following a successful claim for the death benefit or terminal illness benefit." See joint life insurance.

Is the payout taxed, and who receives it?

Royal London's direct terms say its Life Payout "will be free from UK income tax and capital gains tax. However, Life Payouts may form part of your estate when you die – so inheritance tax may have to be paid." The wider picture is in whether a life insurance payout is taxable. That is Royal London's general statement, and tax rules can change; it is not tax advice.

On who is paid, Royal London is explicit: "In the case of a claim for terminal illness, we’ll pay the policyholder directly." Where a policy is in trust, Royal London pays death claims to the trustees, "But for accepted terminal illness, Serious Illness Benefit or Children’s Benefit claims we’ll pay the policyholder." Legal & General's terms, on how it pays claims, say: "If the policy has been placed in trust, we'll pay the trustees." How trusts work is in what a life insurance trust is.

Frequently asked questions

Can I claim life insurance before I die?

On the policies quoted here, yes, if the terminal illness definition is met during the term: the insurer pays while the person is alive and the policy ends. Legal & General's terms add: "You can't make a claim for Terminal Illness Cover after the life insured dies."

Can someone with a terminal diagnosis take out new cover?

Whether an insurer would consider a new application from someone with a terminal diagnosis is a question to put to the insurer, or to a broker, before applying. If you would rather someone asked for you, an FCA-authorised broker can raise it with insurers, and sending the form on this page costs you nothing.

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