Client Profile
Age: 53 years old (at time of passing)
Occupation: Mining Operator
Condition: Terminal Illness (Cervical Cancer), leading to death in May 2025
Claim Type: Super Death Claim, Terminal Illness Claim, and Total and Permanent Disability (TPD) Claim
Benefit Amount: 15,000(TerminalIllnessWithdrawal),15,000 (Terminal Illness Withdrawal), 15,000(TerminalIllnessWithdrawal),540,000 (TPD Sum Insured), $5,000 (Residual Super Balance)
Case Background
DA, a 53-year-old mining operator, faced a critical health crisis with a diagnosis of terminal cervical cancer. Recognizing the urgency of her financial needs, she successfully accessed $15,000 from her superannuation account by meeting the terminal illness condition of release under Superannuation law. This immediate withdrawal provided crucial funds during a challenging time.
Despite her deteriorating health, DA maintained a strategic approach to her financial affairs, leaving a residual balance of $5,000 in her super account. This was a deliberate decision, allowing her TPD claim to be assessed by the insurer while ensuring the super account remained active.
Tragically, DA passed away in mid-May 2025. However, her foresight in pursuing the TPD claim proved beneficial for her beneficiaries. In June 2025, the insurer admitted a $540,000 TPD sum insured, with the date of disability retrospectively set to July 2023. This admitted amount was notably higher than the life cover at the time of her death, underscoring the value of comprehensive insurance coverage.
The total death benefits, comprising the 5,000residualsuperbalanceandthe5,000 residual super balance and the 5,000residualsuperbalanceandthe540,000 TPD sum insured, were paid in accordance with her Binding Non-Lapsing Nomination. This nomination, completed in December 2023, directed 100% of the death benefit to her four adult children, with each receiving an equal share of 25%. The Trustee was thus required to distribute the death benefit as per the valid nomination, ensuring a clear and efficient transfer of funds to her designated beneficiaries.
Medical Evidence
The claim was primarily supported by the diagnosis of terminal cervical cancer, which ultimately led to DA’s passing. The terminal illness condition of release under the Superannuation law was met, allowing for an initial withdrawal of funds. While specific detailed medical reports from multiple practitioners, as seen in the example, are not provided in the source material, the successful terminal illness withdrawal and the subsequent TPD claim admission by the insurer confirm the severity and impact of her medical condition. The insurer’s decision to admit the TPD sum insured with a date of disability in July 2023 further substantiates the long-term impact of her illness on her ability to work.
Claim Resolution
Following DA’s passing, the insurer proceeded with the assessment of her Total and Permanent Disability (TPD) claim. Despite her death in mid-May 2025, the insurer admitted a TPD sum insured of $540,000 in June 2025, with the date of disability established as July 2023. This posthumous admission of the TPD claim highlights a crucial aspect of superannuation and insurance policies, where benefits can still be paid to beneficiaries even after the member’s death, provided the conditions for the claim were met prior to their passing.
TPD Sum Insured Calculation
The TPD sum insured was calculated based on the terms of the member’s employer plan, specifically under Categories P1 and N1 for all employees (excluding Casuals). The agreed cover was determined by the formula: 15% x Salary x Years of Total Service From Commencement of Service To age 70.
•Salary: The base pre-tax salary derived from her occupation with the Employer, plus allowances, immediately prior to the Date of Disablement. Her payslip from June 2023 confirmed a base salary + allowances of 13,669.58permonth,equatingtoanannualsalaryof13,669.58 per month, equating to an annual salary of 13,669.58permonth,equatingtoanannualsalaryof164,034.96.
•Years of Total Service From Commencement of Service To age 70: This refers to the period in complete years from the date DA joined her employer to the age of 70. Given she was 48 years of age when she joined the fund in May 2022, her total years of service to age 70 were calculated as 70 – 48 = 22 years.
Applying these figures to the formula:
15% x 164,034.96x22years=164,034.96 x 22 years = 164,034.96x22years=541,315.37
The admitted amount of $540,000 is consistent with this calculation, demonstrating the insurer’s adherence to the policy terms.
Upon admission of the TPD claim, the total death benefits, including the residual super balance of $5,000 and the admitted TPD sum insured of $5,000 and the admitted TPD sum insured of $5,000 and the admitted TPD sum insured of $540,000, were distributed according to DA’s Binding Non-Lapsing Nomination. This nomination, executed in December 2023, designated 100% of the death benefit to her four adult children, with each receiving an equal share of 25%. The Trustee fulfilled its obligation by paying the death benefit in accordance with this valid nomination, ensuring a seamless transfer of funds to her beneficiaries.
Key Insights
This case provides several valuable insights into navigating superannuation and insurance claims, particularly in complex situations involving terminal illness and TPD:
- Strategic Superannuation Access: Even with a terminal illness, it is possible to strategically access a portion of the superannuation balance for urgent needs while retaining a minimum amount (e.g., $5,000) to keep the account active for ongoing claim assessments. This allows for immediate financial relief without jeopardizing potential future benefits.
- Post humous TPD Claims: This case powerfully demonstrates that a Total and Permanent Disability (TPD) claim can be successfully admitted even after the member’s passing. The insurer’s decision is based on the evidence available at the date of disability, which can be an earlier date than the claim assessment or the member’s death, provided there is sufficient evidence to support the claim under the policy terms.
- Beneficiary Benefits from TPD Admission: The admission of a TPD sum insured after a member’s death can significantly increase the total super death benefits, providing substantial financial support to the beneficiaries. This highlights the importance of having comprehensive insurance coverage in place.
- Importance of Binding Nominations: A valid Binding Non-Lapsing Nomination ensures that death benefits are distributed precisely according to the member’s wishes, streamlining the process for beneficiaries and avoiding potential disputes.
- Holistic Coverage for Future Needs: The necessity of having multiple types of insurance coverage (e.g., terminal illness, TPD, and life cover) is underscored, as it allows for a more comprehensive financial safety net that can cater to diverse needs and unforeseen circumstances.
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Author Profile: Jeffrey Liu, JP, is the founder and principal adviser of Hippo Insurance (aka: Hippo Wealth), with a deep expertise in wealth protection. His extensive experience includes roles in the wealth management divisions of Westpac, ANZ, and a local multi-family office. As the host of “Riches Talk,” a podcast dedicated to cultivating personal and business growth, Jeffrey has established himself as a thought leader in developing life riches. His insights have been featured on SBS, The Australian, and Channel 7. Notably, he was a semi-finalist on Australia’s Got Talent in 2010. Learn more at http://www.hippoinsurance.com.au
