You would typically claim on a life insurance policy in one of two situations.
We’ll start by looking at the first form of payout.
RiskAdviser reports that, in 2014, nearly 1 in 4 claims (from one particular life insurer) were due to a terminal diagnosis. Payments in these cases can assist with:
The payout can also act as a cash buffer if someone in your family needs to take a step back from work to care for you.
Or, you can spend it on a trip to Hawaii! How you choose to use the money is entirely up to you.
You should also know that you can withdraw any superannuation funds you have if diagnosed with a terminal illness. Let your superannuation fund know you have a confirmed terminal illness and have a life expectancy of less than 24 months, along with proof from two separate medical practitioners.
If the payout is due to the passing of the insured, there’s a slightly different process to go through. Typically, you need to call up the insurer, and they will walk you through the steps. You may need to provide them with:
Make sure you have copies of these original documents at hand when you make the call. Once the claim is approved, the insurer may contact you to ask you for additional details.
That’s actually not all the types of cash payout you can claim for from a life insurer. Depending on your policy, you may also be able to claim on the following.
The above are generally sold as separate products, or as ‘linked cover’ with standard term life policies – for additional cost. That being said, the claiming process for them is fairly similar: get in touch with the insurer, and produce the correct information to make your claim.
The information provided here is general only and does not consider your personal objectives, financial situation or needs. Before you decide to purchase a product, it is important to read the relevant PDS.