Life insurance for terminal illness

Terminal illness insurance is generally available as an option with your standard life insurance policy and provides a benefit when you're diagnosed with a terminal illness and are not expected to live for more than 12 months.

What is a life insurance terminal illness benefit?

A terminal illness benefit is an insurance payout usually offered as part of a life insurance benefit. The benefit is paid to you in the event that you are diagnosed with a terminal illness and are only expected to live for a certain amount of time. The benefit is designed to help with any end of life care you may require, as well as any preparations you may want to make before you pass away.

Compare life insurance terminal illness benefits

Most life insurance policies will have a terminal illness benefit included. Some insurers will allow you to claim your entire life insurance benefit as a terminal illness advancement, while others have a limit on the amount you can claim. Pay attention to the column that lists the terminal illness benefit for each provider below, and then hit Get Quote to start comparing.

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Name	Product	Maximum Cover	Maximum Entry Age	Minimum Cover	Terminal Illness Benefit
NobleOak Life Insurance Finder Award		$15,000,000	69	$10,000	$3,000,000	First month free for NobleOak Life Insurance. T&Cs apply.	Get Quote View details	Compare	loading Fetching your data...
Zurich Ezicover Life Insurance		$1,500,000	69	$50,000	$1,500,000	Get the first month free and a 10% discount if you take out a second life insurance policy (discount applies to second policy). T&C’s apply.	Get Quote View details	Compare	loading Fetching your data...
Real Family Life Cover		$1,000,000	64	$100,000	$1,000,000	Get a refund of 10% of the premiums you've paid (in the first 12 months) with The Real Reward™ .	Get Quote View details	Compare	loading Fetching your data...
Guardian Life Insurance		$1,500,000	64	$100,000	$1,500,000	Get Quote View details	Compare	loading Fetching your data...
AAMI Life Insurance		$1,500,000	65	$100,000	$1,500,000	Get 5% off for existing customers.	Get Quote View details	Compare	loading Fetching your data...
ahm Life Insurance		$1,500,000	65	$100,000	$1,500,000	ahm Health members can save 10% off premiums.	Get Quote View details	Compare	loading Fetching your data...
Medibank Life Insurance		$2,500,000	70	$100,000	$2,500,000	You could win a $1000 EFTPOS gift card when you get a Life Insurance quote by 2 Feb 2021. There’s a winner each week. Plus, Medibank health members save 10% every year. T&Cs apply.	Get Quote View details	Compare	loading Fetching your data...

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What terminal illness benefits do life insurers provide?

_{Data taken from brand product disclosure statements on July 2020. Benefits, conditions and amounts are subject to change at anytime.}

• General conditions to be aware of

  Terminal illness benefits will usually be available after:

  • After your plan starts (if you are accepted)
  • Before the plan ends
  • Before you reach its expiry date

  You will generally need to provide:

  • Proof of from an approved specialist confirming you are likely to pass away

What’s considered a terminal illness?

The definition of a terminal illness varies depending on your policy. If you hold cover outside your super, before paying a terminal illness benefit the insurer will need to be satisfied that you will likely pass away as a result of your illness within a timeframe of either 12 or 24 months. Check the fine print of your life insurance policy to find out which terminal illness timeframe applies to your cover.

Can I claim this benefit if I buy my policy after I’m diagnosed?

• No. Life insurance provides financial protection for your loved ones against the unexpected, not for when you find out you’re sick.

When you apply for life insurance cover, you’ll need to provide some important details about your health and medical history. Depending on the type of policy, you may also need to undergo medical tests to determine your overall health. So if you’ve already been diagnosed as terminally ill, life insurers will refuse to provide you with any cover.

Rather than having to wait for you to pass away before receiving a benefit, your family can receive the immediate financial support they need

Terminal illness benefit vs a death benefit

Payout upon diagnosis

The main advantage of receiving a terminal illness benefit is that you receive quicker access to the proceeds of your life insurance policy. This allows you and your loved ones to cover the costs that could arise immediately after a diagnosis of terminal illness, such as medical expenses and an ongoing replacement income. Rather than having to wait for you to pass away before receiving a benefit, your family can receive the immediate financial support they need.

Choose how you spend your final moments

Receiving a terminal illness benefit instead of a death benefit also allows you to live the rest of your life how you want. Rather than stressing about money and providing for your family, a terminal illness benefit can help you tick a few items off your bucket list or to create some precious memories together with your family. In addition, instead of dealing with the stress of making a life insurance claim when you pass away, your family will be able to focus on grieving their loss.

What can I use a terminal illness benefit for?

There are no restrictions on how you can use a terminal illness benefit. While a large portion of the proceeds will most likely go towards providing for your family after you’re gone, you might also want to use some of the benefit for the following:

• To cover the cost of specialist medical treatment
• To pay for accommodation close to specialist medical facilities
• To pay for the cost of transport to and from medical facilities
• To cover the cost of palliative care
• To replace the income of a family member who takes time off work to become your full-time carer
• To take a holiday with your family or tick some other items off your bucket list

How do I make a claim for terminal illness?

You will need to follow a few simple steps to make a terminal illness claim under your life cover policy. After contacting your insurer, you will usually need to provide the following:

• A completed claim form. Your insurer will send you a form to complete. Your treating doctor and specialist will also need to fill out sections of the form.
• Proof of ID. You will need to provide a certified copy of your birth certificate, your current Australian passport or your driver’s licence.
• Policy details. Next, you will need to provide your original policy document and policy schedule.
• Medical information. Your insurer will also need copies of any relevant medical reports, test results and investigations performed.

Once you’ve submitted all the required information, your claim will typically be processed as quickly as possible.

How is terminal illness insurance different from critical illness cover?

Terminal illness insurance is different from critical illness insurance but the two terms are often used interchangeably.

• Critical illness insurance. Critical illness cover (also known as trauma insurance) can be bought as either a standalone product or as part of your life insurance policy. The policy will provide you with a lump sum payment if you're diagnosed with any one of the critical illnesses listed in the policy document. These policies generally include caveats such as the insured must live for minimum number of days after being diagnosed, generally 20 to 30 days, before a benefit will be paid.
• Terminal illness insurance. A terminal illness benefit is not available as a standalone product. It provides you with a benefit when you've been told that you have a maximum of 12 months to live.

Do I need to tell my insurer if I already have a terminal illness?

When applying for life insurance the insurance company will factor in your age, health employment, environment, an other activities, in order to be able to arrive at the correct premium for you to pay. It is important that you be honest in answering all these questions.

Why do I need to disclose my health?

Most life insurance policies will look at your risk when:

• Arriving at the correct premium to charge you for basic life insurance
• Accepting your policy.
• Providing you with benefits.

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