Terminal Illness Benefit

Terminal illness benefit has become a standard feature in Australian life insurance policies, providing compassionate early access to death benefits without waiting for actual death. Eligibility requires two essential criteria: medical certification from two qualified medical practitioners (typically treating specialist and independent specialist) that the insured suffers from a condition or illness that is incurable and will likely result in death, and certification that life expectancy is 12 months or less (some older policies specify 24 months). Common qualifying conditions include advanced cancers with metastasis, end-stage organ failure (heart, liver, kidney, lung), advanced motor neurone disease, and late-stage AIDS. The benefit typically equals the full sum insured, paid as lump sum, causing policy termination as the death benefit is exhausted. Some policies offer partial terminal illness claims, retaining some death benefit. Superannuation-based policies offer particular advantages, as terminal illness benefits qualify for early release under compassionate grounds regulations, avoiding preservation age requirements and potential tax benefits under terminal medical condition release provisions (tax-free regardless of age or dependency status). The claims process requires comprehensive medical evidence: specialist reports detailing diagnosis, prognosis, treatment history, current treatment plans, and specific life expectancy statements. Multiple specialist confirmations ensure accurate diagnosis and prognosis. Processing times vary from 2-8 weeks depending on medical evidence completeness. These benefits provide crucial support during the final phase of life: replacing income when work becomes impossible, covering experimental treatments or additional therapies insurance doesn't cover, palliative care costs, end-of-life care preferences (home care, hospice), family travel and time together, debt repayment reducing family burden, and final arrangement planning. Modern policies have evolved from requiring imminent death to recognizing that terminal diagnoses often occur 12-24 months before death, allowing the insured to benefit from their own insurance rather than only providing for survivors. This represents significant humanitarian progress in insurance design, acknowledged by regulators and consumer advocates as appropriate product evolution benefiting policyholders.