Money Expert > Life Insurance > Claiming Life Insurance When You Are Alive
Claiming Life Insurance When You Are Alive
Last updated: 06/06/2025 | Estimated Reading Time: 6 minutes
Money Expert > Life Insurance > Claiming Life Insurance When You Are Alive
Last updated: 06/06/2025 | Estimated Reading Time: 6 minutes
Most life insurance policies won’t allow you to make a claim while you’re still alive. This is because life insurance is designed to support your family after your death. However, if you are diagnosed with a terminal illness and given less than 12 months to live, you will be able to make a claim before your death.
Ultimately, your ability to claim life insurance while you’re alive will depend on the policy you have taken out. This is why it’s so important to make sure your life insurance policy aligns with your needs before making a commitment. Some policies offer living benefits, which provide you access to part of the death benefits while you are still alive under qualifying circumstances.
But which types of life insurance will allow you to cash in before your death and which one is best for your financial security?
This guide will help you to develop a deeper understanding of how life insurance works and all the different ways you may be able to use your policy while you’re alive.
Traditional life insurance policies work by paying out a lump sum of money to your family when you die. There are two main types of life insurance that your policy is likely to fall into:
With this type of policy, you’ll be covered for a specific period of time, whether that’s a decade or even longer. If you die within the agreed-upon window, your insurance should pay out. Term life insurance policies are usually a more affordable option, particularly if the term is short or decreasing. However, they do not accumulate any financial assets or cash value that you can use during your lifetime.
To make sure you’re always covered throughout your entire life, you will need whole life insurance. This type of policy doesn’t have an expiration date and will pay out when you pass away, not if. It’s usually more expensive than term life insurance. It does not have a cash in value at any stage in the policy’s lifespan meaning the policy will only pay out upon your passing.
It is possible to get money from your life insurance policy while you’re alive, but you must have the right kind of cover. Some life insurance policies will only pay out if you’re severely ill, while others may allow you to cash in a lump sum for any number of reasons. However, many life insurance policies will only pay out after your death, so make sure you read your policy documents carefully.
It could be possible to get money from your life insurance policy whilst you’re alive. But you must have the right kind of cover. Life insurance policies tend to include Terminal Illness cover meaning if you are diagnosed with a terminal illness and given less than 12 months to live, you can claim on your life insurance whilst you are alive. If you have critical illness cover and are diagnosed with a serious illness, you may be able to claim on your policy providing your diagnosis meets your policy definitions. So make sure you read your policy documents carefully. Critical illness may be purchased alongside life insurance or as a standalone product* for an additional cost.
*note not all brokers offer standalone critical illness cover.
Accidents and illnesses are one of the most common reasons people want to make a claim on their life insurance. If you are unable to work and financially support your own family members due to your declining health or a recent disability, the following types of life insurance will make it possible to access your money while you’re alive.
Also referred to as terminal illness cover, accelerated death benefit is something that many life insurance policies include or offer as an add-on. It means that if you are diagnosed with a terminal illness and given less than 12 months to live, you can claim on your life insurance in full. However,If you do make this claim there will be no protection left in place. For example, if someone is insured for £150,000 and are diagnosed with a terminal illness and given less than 12 months to life they will receive £150,000 and the life cover policy will cease.
When compared to Terminal Illness Cover, Critical Illness Cover is a separate policy that will allow you to make a claim if you are diagnosed with a serious illness that meets your policy definitions whilst you are still alive. If you were to pass away without having claimed on your Critical Illness Policy and within it’s policy term, the lump sum will act like a Life Insurance Policy and pay out upon your passing. Critical Illness cover mainly includes conditions life heart attacks, cancer, organ failure, blindness and Parkinson’s disease.
If an injury or accident prevents you from working or results in a long-term disability, personal accident cover will pay out to help you cover any associated medical expenses and your living costs. However, it's important to note that personal accident cover is not a form of life insurance and not all of the broker partners we work with offer this.
Life can be unpredictable and sometimes you may need a lump sum of money for a reason that’s unrelated to your health. However, life insurance will only pay out whilst you are alive if you are diagnosed with a terminal illness and given less than 12 months to live. No other reason would be considered.
If you have term life insurance coverage, you won’t be able to claim on your policy for any other reason than the ones outlined in your policy documents. This is because the monthly payments you make do not provide cash value growth. You’re essentially paying for life insurance cover as a temporary service, not using it as an investment.
If you’re looking to buy life insurance for the first time or change the policy or life insurance payout you currently have, our qualified brokers can provide the insight you need to make the best decision possible. Whether you’re hoping to find life insurance with critical illness cover, living benefit riders, or want to explore dividend-paying policies in further detail, our comparison service makes it easy to narrow down your choices.