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Life Insurance

Terminal illness and life insurance cover

A good life insurance policy will pay you a lump sum amount if you get diagnosed with a terminal illness.

How do insurers define terminally ill?

Generally speaking, the insurance companies that we work with at LifeDirect will classify you as terminally ill if you are likely to die within 12 months. In this situation, your insurer will rely heavily on the opinion of the medical practitioner who is treating you and your illness.

As soon as your insurer is notified that there is a possible claim to be made, they will contact your doctor and request the details of your condition, and get an idea of your life expectancy. They will assess this and quickly decide whether the life cover sum insured is to be paid out.

This kind of early payment is very important as it's actually very rare for someone to die suddenly. Typically people have more “warning” and are aware of the health issue for a significant time prior to actually passing away. A terminal illness payment provides options in this situation, giving you the chance to stop work and spend time with family or even pursue alternative courses of treatment.

Do you need to repay your cover?

A good question we get asked is: if your terminal illness diagnosis is proved incorrect and you're no longer terminally ill, but you've already been paid out, will your insurer request that the life insurance sum be paid back?

The answer is no! Once you've been paid, you won't have to refund the payout.

If you'd like to look into your options for life insurance, get in touch. Start a free life insurance quote online and compare from NZ's leading insurers. Or if you'd rather have a chat, you can give our Wellington based team a call on 0800 800 400, and we'll lend a hand.

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