Does a critical illness have to be terminal to receive compensation?
Published 18 Dec 2018
Receiving the news that you’ve been diagnosed with a critical illness is not only hard to take, it also puts undue financial stress on yourself and your family. Luckily, many superannuation plans provide terminal illness cover to offset the cost of medical treatment and legal arrangements.
However, can individuals access this support if the disease is serious but not yet terminal?
What is the difference between critical illness and terminal illness cover?
Critical illness insurance can be purchased as a standalone product from an insurance provider, but generally isn’t provided as part a standard superannuation plan. Instead, individuals can often claim payouts through total personal disability (TPD) or temporary income protection. This cover provides individuals with a lump sum to be collected if they are diagnosed with any of the illnesses listed in their policy document that affects their ability to make a living.
Terminal illness or death insurance, meanwhile, is often included as a default option in a superannuation scheme. This provides a payout to individuals diagnosed with a proven terminal disease, with different policies covering different maximum amounts of time left to live.
As such, your illness does not have to be terminal in order to receive a compensation payout – claiming on critical illness just requires individuals to file their application through a different scheme.
How do I prove my illness is critical or terminal?
If you are suffering from a critical illness, TPD entitlement or income protection within your superannuation policy can provide financial support. Individuals need to prove that their illness prevents them from returning to their job or any other employment. This can be done through presenting medical certificates secured from a medical expert, or a letter from the employer confirming the termination of employment due to illness. If successful, claims can pay out as either a lump sum or ongoing contributions of up to 75 per cent of an individual’s weekly wage.
In the case of terminal illness, the Australian Taxation Office specifies that medical experts need to corroborate the claim that your disease is terminal, meeting the following conditions:
- Two registered practitioners, jointly or separately, certify that an individual suffers an illness that will likely result in death over the next 24 months following certification.
- At least one of these medical experts is a specialist practising in an area related to the applicant’s disease.
- The certification period authorised by either practitioner hasn’t lapsed.
Want to make a claim on your superannuation policy because of serious injury? We believe that individuals should get the support they need when they need it, which is why we have experts in superannuation law ready to fight your corner. For help, reach out to Gerard Malouf & Partners today.