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Term Life Insurance for Terminal Illness

Written by Life-Wealth-Win

If you’re looking for term life insurance terminal illness, you’ve come to the right place. There are still some life insurance options for people with a terminal illness.

Being diagnosed with a terminal illness makes you think about your loved ones. One of the things you will have to decide is how to protect your family best financially and what to leave behind for them. 

If you’re wondering if you could still buy a term life insurance terminal illness policy to protect your family financially, then the surprising answer is yes you can; however, your options may be very limited.

The good news is there are special policies designed for these situations which are available to benefit the families of terminally ill patients.

In this article, we will explore the life insurance options open for people with a terminal illness.

People with some terminal illnesses are still considered insurable.

The most important thing to do to get term life insurance terminal illness is find an agent who is knowledgeable of the industry who can find the right policies at reasonable prices for people in this situation. Not all agents specialize in terminal illness life insurance policies. You need an agent that is familiar with these plans and who can get you the best deal possible.


A terminal illness is an illness that will cause the death of a patient in a short period because the illness has no known cure, or has progressed to the point where it can’t be cured.

Terminal illness is determined by a qualified doctor and is defined as an illness that will lead to death within 12 months.

Here are the most common types of terminal illness:

  • Heart disease
  • Advanced cancer
  • Muscular Dystrophy
  • Cystic Fibrosis
  • Scleroderma
  • Amyotrophic lateral sclerosis (ALS)
  • Parkinson’s disease
  • Dementia and Alzheimer’s disease

There are other terminal illnesses, but these are considered the most common in the U.S.


Cancer in itself is not considered a terminal illness. It depends on the type of cancer and the stage it is in when first diagnosed.

For example, melanoma or skin cancer has a high mortality rate when it afflicts a person. However, as long as cancer remains on top of the skin, it is highly curable and not considered terminal.

Cancer in its early stage is considered highly curable when treated.

Terminally ill insurance coverage and critical illness insurance are different. It must not be confused with one another since many critical illnesses are not fatal.

Each type of insurance is very different from the other and should not be confused when the policyholder chooses the right one for their needs.


 Terminal Illness

  • Payout upon diagnosis of under 12 months to live.
  • Included in many life insurance policies
  • Acts as an early pay-out from your Life Insurance

Critical Illness

  • Claims can be made upon diagnosis of a pre-defined critical illness
  • Need to be added to your policy in the application
  • Acts as separate pay-out, so you could claim for critical illness and still claim for life insurance
  • The payout can be claimed any time within the policy term


If you already have a term life insurance terminal illness policy before you become terminally ill, you may initiate the accelerated living benefit within your policy to provide funds immediately. This will allow you to receive a portion of your life insurance benefit before you pass away.

You can use the money to pay for your current medical costs or treatments that are not covered by your life insurance. You can also use the money on the last vacation with your family.

In fact, the money can be spent on anything that you desire.

The amount of the accelerated living benefit varies from state to state, but it’s generally 50% to 80% of your total policy amount.

Requirements for adding options to a traditional Life Insurance Policy

  • Your terminal illness must result in your death within a specific amount of time (6-24 month life expectancy).
  • You have a terminal illness such as heart attack, stroke, cancer, end-stage renal failure, major organ transplant, ALS, and paralysis.
  • You must be living in a nursing home because of your illness
  • You are unable to do the daily activities that are needed to get by from day to days such as eating, bathing, continence, dressing, and toileting.


Term life insurance is the most popular choice due to the amount of protection you can purchase and the affordability of life insurance.

Some term life insurance policies will allow you to receive cash from the death benefit while you are still alive.

Now, if you get sick from a terminal illness, you can receive cash from your policy. A term life insurance policy with living benefits is a basic term life insurance policy.

The living benefit is a free policy rider that allows you the opportunity to advance a portion of the death benefit associated with a terminal illness.

Term life insurance terminal illness with accelerated living benefits provides a death benefit with a fixed premium period typically 10, 15, 20, 25 or 30 years.

Term life insurance with accelerated living benefits can help pay:

  • Lost income when you cannot work due to illness
  • Medical bills and Medicare that are not covered by health insurance
  • Nursing home or facility long-term care needs


Although term life insurance is popular, there are only a few life insurance companies that offer critical or nursing home living benefits with their term life insurance plans.

However, terminal illness accelerated living benefits are offered by most life insurance companies.

In most cases accelerated living benefits are tax- free but it can be taxable under a specific circumstance. It is essential to consult an accountant before accelerating any benefit.


Most life insurance policies require a medical exam and access to your medical history. Being terminally ill will disqualify you from whole life insurance and term life insurance.

Since you can’t buy either whole life or term life insurance terminal illness, the best option for you is a guaranteed issue life insurance plan which you can get with no questions or exam.

A guaranteed issue life insurance plan is the best life insurance for the sick and elderly because it offers face amounts ranging from $1,000 to $35,000.

It is not only for terminally ill patients but for anyone who has a medical condition that may disqualify them from a whole or term life policy.

These policies are cash value whole life insurance policies that come with a two or three graded death benefit periods.

Guaranteed issue life insurance is no medical exam policies; no medical questions are asked on the life insurance application. Once you apply, you will be approved within minutes.

We highly recommend this policy for people who are considered high risk. The premiums can be expensive, but the rates will depend on the companies offering plans. This policy is perfect for those who are terminally ill.


Graded life insurance policy is a whole-life product that begins with a set benefit amount that increases over time. These plans are a good investment for someone faced with a terminal disease who doesn’t know if he or she will survive for long.

During the first 12-24 months of the policy, the policy face amount gradually increases, then levels off. Your beneficiaries receive a refund of the premiums plus some interest if the insured dies within the first two years that the policy is in force.

If you survive the first two years of the policy, the full face value is paid upon death.

The money spent on the premiums is guaranteed to be returned if you don’t outlive the graded death benefit period. after a 24 month period, your beneficiaries will receive the total insurance payout that you signed up for.


Final expense is another life insurance option if you are terminally ill. This policy gives out a small amount of money to your family when you pass away to cover for the funeral expenses.

This funeral plan for terminally does not require any physical exams, so even if you’re terminally ill, you can purchase this policy.

A final expense policy may be your best option if the high cost of a funeral is your primary concern for your loved ones.

Final expense insurance includes final expenses as well as the cost of a burial.

You can secure a final expense policy up to $50,000. Applications for burial insurance typically get approved quickly so you can obtain a plan within a few days. If you have health challenges, you can choose a graded death benefit for your final expense insurance policy with no health questions.


You still have life insurance options even when you are terminally ill as you can purchase a guaranteed issue policy or a final expense policy. Are you unsure about guaranteed issue life insurance policy? Don’t let your doubt get in the way of buying life insurance.

Life Wealth Win is an independent life insurance agency that works with 40 plus top rated companies, and we can help you find the best insurance companies for your situation.

We recommend you to work only with agents that specialize in high-risk clients for final expense and burial policies. Call us today for a free consultation at (888) 435-4342 and we can help you look for life insurance companies that offer the best terminal illness coverage and pricing.

About Life-Wealth-Win
About Life-Wealth-Win

We work with individuals across the nation to secure the best life insurance rates.

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