To receive the payout, 2 medical practitioners must certify you have less than 12 (or 24) months to live.
What is terminal illness insurance?
Terminal illness insurance is a type of life insurance policy that pays out if you're diagnosed with a severe illness you aren't expected to recover from within a certain time period (often 12 months). Examples of such diseases can include advanced cancer or heart disease. Generally, you'll be eligible for terminal illness insurance unless you have a linked pre-existing condition that may shorten your life.
The payout from terminal illness cover 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 with terminal illness benefits
All of the life insurance policies below come with
Data taken from brand product disclosure statements on August 2022. Benefits, conditions and amounts are subject to change at anytime.
What’s considered a terminal illness?
A terminal illness is a condition which cannot be cured and is likely to lead to someone's death.
To be eligible for a terminal illness payout:
You must be medically certified, by 2 registered medical practitioners, jointly or separately, as having a terminal illness that is likely to result in your death within 12 or 24 months.
1 of the registered medical practitioners must be a specialist practicing in an area related to your illness or injury.
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
Why you can trust Finder's life insurance experts
We're free
You pay the same as buying directly from the life insurer. Better still, we regularly run exclusive deals that you won't find on any other site – plus, our tables make it easy to compare policies.
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Our team of life insurance experts have researched and rated dozens of policies as part of our Finder Awards and published 250+ guides to make it easier for you to compare.
We're independent
Unlike other comparison sites, we're not owned by an insurer. That means our opinions are our own and we work with lots of life insurance brands, making it easier for you to find a good deal.
We're here to help
Since 2016, we've helped 270,000+ people find life insurance by explaining your cover options, simply and clearly. We'll never ask for your number or email. We're here to help you make a decision.
Frequently asked questions
Terminal illness insurance is a type of life cover that pays a lump sum if you get diagnosed with an illness which cannot be cured, such as advanced cancer. In general, you'll be eligible for terminal illness insurance unless you have a linked pre-existing condition.
Yes. Most life insurance policies will come with terminal illness cover. This means it will pay you a lump sum before you die, if you're diagnosed with a terminal illness and have less than 24 months left to live. Terminal illness benefits can range from around $1 million to as much as $25 million in Australia.
Yes. If you have a terminal illness and a life expectancy of less than 12 months, you may be able to access your life insurance lump sum benefit from your superannuation fund, so long as you have a policy in place. Reach out to your super fund to find out more.
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 insurer has 10 days to respond.
Typically, no. If you have already been diagnosed as terminally ill, it's very unlikely that an insurer will agree to cover you. Life insurance provides financial protection for your loved ones against the unexpected, not for when you find out you're sick
Critical illness insurance, (also known as trauma insurance) can be bought as either a standalone product or as part of your life insurance policy. It pays out if you're diagnosed with any one of the critical illnesses listed in the policy document.
No, a terminal illness lump sum payment is tax-free, so if your benefit amount is $1 million, that's exactly how much you'll receive.
Gary Ross Hunter is an editor at Finder, specialising in insurance. He’s been writing about life, travel, home, car, pet and health insurance for over 6 years and regularly appears as an insurance expert in publications including The Sydney Morning Herald, The Guardian and news.com.au. Gary holds a Kaplan Tier 2 General Advice General Insurance certification which meets the requirements of ASIC Regulatory Guide 146 (RG146).
Life insurance can be bought directly from an insurer. Learn about the benefits and a few watch outs you should be aware of.
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