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Part #2: Understanding terminal illness claims

Part #2: Understanding terminal illness claims

Published on August 2, 2023 by Hanaan IndariHanaan Indari

Superannuation plays a vital role in providing financial security for Australians during their working years and beyond. In addition to retirement benefits, superannuation can also offer provisions for terminal illness claims. The second part of our superannuation series explains the process for terminal illness claims.

What is a terminal illness claim?

A terminal illness claim is a specific type of claim that can be made by your superannuation fund if you have been diagnosed with a terminal medical condition.

It is typically defined as a condition where you are likely to pass away within a specified time, usually 24 months or less. A terminal illness claim allows you as the member with a diagnosed terminal illness to access your superannuation benefit before reaching your preservation age. This provision aims to provide financial assistance during your final stages of life and allows you the flexibility to manage your financial affairs.

While there are no restrictions on how you can use a terminal illness benefit, and a large portion will likely go toward providing for your family after you have gone, you may use the benefit to cover the cost of medical treatment, pay for accommodation to be close to medical treatment or specialist facilities, to cover transportation costs or palliative care or may be give you flexibility for a family member to take time off work to be a full time carer.

What are the steps to bring a terminal illness claim?

1. Medical certification

You as the member must obtain certification from two registered medical practitioners stating that you suffer from an illness or injury that is likely to result in death within a specified timeframe (usually a prognosis of 24 months or less). It is important to consider the terminal illness definition that is outlined in your policy document.

2. Fund notification

You should inform your superannuation fund about your terminal illness diagnosis. Contact your superannuation fund for the specific forms and procedures they require to be completed to make the terminal illness claim.

3. Gather the required documents

The fund will typically request supporting documents, including the medical certifications, your identification, and any additional information required to validate your claim.

4. Fund assessment

Your superannuation fund will assess the claim based on the provided documentation and determine your eligibility for early access to the superannuation benefit due to the terminal illness. The fund will then process the payment according to the chosen payment method.

How are the benefits paid?

If your terminal illness claim is approved, the superannuation fund will make a lump sum payment to you. The amount of the benefit paid will depend on your policy and the insurance that you have under the policy in addition to you account balance and any other insurance you may have under the policy that you might be entitled to claim for.

Understanding the processes involved is essential to ensure a smooth and timely claim. Seeking professional advice can also be helpful in navigating the complexities associated with these types of claims, especially as you are making these types of claims in what is usually an overwhelming time.  

You can contact us at Carroll & O’Dea Lawyers on 1800 059 278 or via our Contact Page if you need help making a claim and one of our lawyers will assist you.

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