Claiming a benefit for terminal illness

Desperate and on the verge of tears, Lucy* called ClearView bracing herself for more bad news.

After a 20+ year battle with Parkinson’s disease, Lucy’s husband Patrick* was edging closer to the end. His health had deteriorated to the point where he could no longer wash, dress or feed himself. He required around the clock care and had moved into a nursing home. The bills were mounting.

Lucy called ClearView to talk about her husband’s life insurance policy and potential options for premium relief, as she was surviving on the age pension and had maxed out her credit cards. Other urgent payments also arose including veterinary bills for her sick dog and car repairs needed to make the daily drive to see her husband.

Despite Patrick’s grim prognosis and an imminent life insurance payout, Lucy felt pressure to cancel his policy, after decades of diligently paying premiums. She held little hope for leniency.

Instead, she received compassion, understanding and a terminal illness benefit paid within months to help her care for her terminally ill husband.

The inclusion of a terminal illness benefit is common with life insurance. It means that if the life insured is diagnosed as terminally ill, as certified by two medical practitioners and given a short life expectancy, part or all of the life cover benefit can be paid early.

Any outstanding amount (in the case of a partial payment) is payable upon death of the life insured.

Importantly, the insured does not pay any further premiums. Lucy had no idea that her husband’s life insurance policy included a built-in terminal illness benefit.

“I was thinking about stopping (the policy) and I explained that to the lady on the phone. She asked about my situation and then told me that I may be able to claim on my husband’s policy now,” Lucy recalled.

“I didn’t think there was any chance so I held little hope but she told me to send in all the documentation I had and she would send it to ClearView’s doctors. She said leave it with us and then later I was told my claim had been accepted.”

Upon receiving the medical opinion of two doctors, Lucy was paid the total death benefit amount.

“I feel like ClearView has given me a second chance and I can’t thank them enough,” she said.

“After migrating to Australia from England, I was disinherited and I didn’t have anyone to turn to. I guess someone up there was working on someone down here at ClearView. Sometimes strangers treat you better than family. Sometimes the ones you think you can trust end up being the ones you can’t.”

“Sometimes strangers treat you better than family.”

At time of writing, Lucy continues to visit Patrick daily. “It’s always sad when someone dies suddenly and is taken too soon but in some ways it’s harder when they go into a home and deteriorate slowly. It is so stressful and costly.”

“Life insurance with ClearView has been invaluable but, in hindsight, I wish we had also taken out trauma cover.

“If someone is diagnosed with an ongoing illness, they can live for a long time and it’s important to protect yourself and your family.”

I feel like ClearView has given me a second chance and I can’t thank them enough.”

What is a terminal illness benefit?

If the life insured is diagnosed as terminally ill, some life insurance policies will pay up to 80% of the death benefit amount while the insured is still alive.

This benefit is designed to allow a policyholder to use their funds to cover medical expenses and make plans to care for dependents before their death.

‘Terminal illness’ has a specific definition under a Product Disclosure Statement (PDS), but usually it means that, two medical practitioners have conclusively diagnosed that the life insured is suffering from an incurable sickness and has a limited life expectancy.

Advanced forms of cancer, Parkinson’s disease and dementia are common examples of the kinds of conditions that see a terminal illness benefit paid.

*Not their real name.

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