1. Life cover pays a lump sum if you die.
We don’t really like talking about death and dying, but to help you understand the benefits of life cover, we have to go there. At its heart, life cover is about protecting the financial wellbeing of your family if you’re no longer around to help them. If something happens to you, your family can get a lump sum payout to use anyway they like.
When you take out life cover, you can decide how big you’d like the lump sum to be if there’s a death insurance claim. When you apply, you’ll be asked to supply heath and possibly financial information. The insurer will need this to assess whether they can give you the amount of cover you’ve asked for.
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2. Life cover could pay funeral costs.
Life cover can make an advanced payment of up to $15,000, which can be helpful to cover funeral costs. This gets deducted from the rest of the amount you are insured for. It can provide some relief for family members knowing that the funeral costs can be paid for when needed.
3. Life cover pays 30% of the lump sum if you get one of these.
If you’re diagnosed with one of the specified terminal illness conditions below, you can apply to receive 30% of your lump sum early, up to a maximum of $250k. This is called a Terminal illness partial benefit payment and it applies to:
- Motor neurone disease.
- Stage 3 or 4 Exocrine Pancreatic Cancer.
- Stage 4 non-small cell lung cancer.
- Stage 4 Distal Oesophageal Cancer.
- Stage 4 Liver Cancer.
- Stage 4 Stomach Cancer.
- Class 4 Congestive Heart Failure that is unresponsive to treatment.
The remainder of the lump sum is paid out as a death claim.
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4. Life cover pays the full amount if you’re given less than 12 months to live.
If you’re the policy owner and have your life insured with Fidelity Life and are diagnosed as terminally ill and given less than 12-months to live, you can apply for early payment of the entire lump sum.
It means you can help with setting up your family’s future financial security through actions like paying off debt. You could also use some of the money for holidays and special experiences with your family.
You can choose to add Fidelity Life’s Terminal illness booster to your Life cover policy. This is an additional benefit (which you pay extra for), where it can give you up to an additional 25% of the total amount you’re insured for (up to $500k). It’s payable if you’re diagnosed as terminally ill. This extra payment can help you achieve your wish list and also provide some financial protection for your family.
Money from a claim can be used for anything.
When money is paid out from a life cover claim, you or your family have the flexibility to decide how to use it. However, planning what to do with a large lump sum payment can be overwhelming. To help with these decisions, working with a financial adviser can be invaluable. When you receive a payment of $100k or more from your Life cover policy from Fidelity Life, we will reimburse the costs (up to $2,500) for a fully documented financial plan prepared by a financial adviser.
Get expert help with other big questions, like how much cover for life insurance?
The best way to get life cover that suits your situation and budget is to work with a financial adviser. An adviser can help with all the detail, like what does life insurance cover, how much cover to get and how long to keep your cover going.
Advisers are usually able to meet you at home outside your work hours or you can arrange to meet an adviser at their office. You can have a meeting, think about what you’ve learned and make the decision when you’re ready.
DISCLAIMER: The information contained in this article is a summary of the key points of the insurance cover(s) mentioned and is general in nature. This article does not constitute a financial advice service. All covers are subject to the definitions, standard exclusions/limitations, terms and conditions contained in the full policy documentation which is available from Fidelity Life or your financial adviser who holds a Distribution Agreement with Fidelity Life. All applications for cover are subject to underwriting criteria.
