Which policy is most likely to include the option of terminal illness cover?

The option of terminal illness cover is most commonly found in term assurance policies. This coverage allows the policyholder to receive a lump sum benefit if they are diagnosed with a terminal illness, typically within a specified timeframe, often defined as having a life expectancy of 12 months or less.

Term assurance is designed specifically to provide financial support in the event of death within a specified term. Including terminal illness cover serves to enhance the policy's utility by allowing policyholders to access funds before their death, should they face a terminal diagnosis. This feature is especially valuable for individuals who want to ensure their loved ones are financially secure during a challenging time.

Other types of policies have different focuses. Income protection primarily provides a replacement income if the policyholder is unable to work due to illness or injury, but it does not typically offer a terminal illness benefit. Universal life insurance combines a death benefit with an investment component, but while it may offer certain living benefits, terminal illness coverage is not standard and can vary widely among providers. Pension plans are savings instruments focused on retirement income and typically do not incorporate life insurance features, including terminal illness cover.