You don’t need to wait until death to get a claim paid on your life insurance. 93% of deaths in New Zealand are illness related so people don’t die straight away. Life Insurance generally has a terminal illness benefit built into it where once a medical professional has given their assessment that the life insured has 12 months or less to live then the insurance company will pay out the life cover.

You may ask what would happen if an insurance company paid out and then the life insured didn’t die, I do know of one case where the insured survived at least eight more years and in fact may be still alive today. In the words of the insurance company that paid out, “that is what the insurance is there for” and the doctor is not going to sign off on someone only having 12 months to live if they were going to live longer as their standing in the medical fraternity would not last for long.

The great thing about this benefit is that the insured and their family can use the money before they die so doing the important things and getting plans in place. Martin Crowe has recently had his life insurance paid out because of his deteriorating health situation, for further details please read this article.

However, sometimes it can be hard for doctors to sign off that clients have 12 months to live when their prognosis whilst not great is still unpredictable. This is where having “living insurance” products such as trauma or crisis cover is quite important. This type of insurance is generally linked to your life insurance and pays out for approximately 43 different types of illnesses or injuries; however 75% of all claims in New Zealand are for cancer, heart attacks or strokes.

Having this cover means that your partner could stop work if needed for a period of time or it would help cover lost income if you were unable to work. Having a lump sum of cash in the case of being seriously unwell can be quite beneficial and it is a proven fact that when people have the financial burden removed that their chances of recovery from serious illness are a lot higher.

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