Terminal Illness Benefit

The terminal illness benefit is generally a built-in benefit that comes as standard with your life insurance policy. It allows for your life insurance policy to be paid to you or your beneficiaries if you are diagnosed with a terminal illness.

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How does the benefit work?

If you are diagnosed with a terminal illness, you can have your full life insurance benefit paid to your beneficiaries and do not have to wait until you pass away.

In order to receive the benefit, a medical specialist will need to confirm the diagnosis and a claim will need to be submitted to your insurer. Your insurer will also need to agree with the diagnosis and may also need to approve the medical specialist.

Once you have received your benefit, your policy will end.

Do I need to use this benefit?

You are not obligated to use this benefit, but it is available at your discretion. When you are comparing life insurance quotes speak to one of our advisers to have this benefit included.

What is a terminal illness?

A terminal illness is generally defined as:
‘The diagnosis of an illness which in in the opinion of a medical specialist is likely to result in your death within the next 12 months, regardless of any further treatment.’.
The medical specialist’s opinion may need to be based on clinical findings and reports in order for the benefit to be paid.

How does this benefit work in a combined policy?

If you have a life insurance policy that is combined with trauma or TPD insurance, the benefit paid out will reduce the other benefits as per normal. If the terminal illness benefit pays out more than the the other benefits, they will be reduced to zero.

Published: August 11, 2015

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