Can I Make a Terminal Illness Claim While Still Working?
- May 16
- 9 min read
One of the most common questions Better Claim receives from people recently diagnosed with a terminal illness is whether they can still access their super insurance benefit if they are still working.
The answer is yes.
Your ability to make a terminal illness claim through your superannuation is not determined by whether you are currently employed. It is determined by your medical prognosis and the terms of your super fund's life insurance policy.
Many Australians continue working after a terminal diagnosis. Some work because they want to. Some work because they need to. Some work as part of staying active and engaged during treatment. None of those reasons disqualify a person from accessing a terminal illness benefit through super.
This guide explains what does determine your eligibility, what happens to your claim if you continue working, and how Better Claim manages the process for people in your situation.
What Actually Determines Eligibility for a Terminal Illness Claim
A terminal illness claim through superannuation is made under the life insurance policy held within your super fund. Life insurance is not tied to employment status in the way that income protection is.
To qualify for a terminal illness benefit, the following criteria apply:
Your super fund must hold an active life insurance policy in your name at the relevant time
Two registered medical practitioners must certify your prognosis, with at least one being a specialist in the area relevant to your condition
Both practitioners must confirm that, despite receiving all reasonable medical treatment, you are likely to die within 24 months (or 12 months under some older policies)
Notice what is not on that list. There is no requirement that you have stopped working. There is no requirement that you are unable to work. There is no requirement that your condition has reached an advanced or palliative stage.
The eligibility test for a terminal illness benefit is a clinical prognosis test, not a functional capacity test. It is about what your doctors assess as the probable outcome of your condition, not about what you are currently able to do.
Over $1 billion in super insurance benefits goes unclaimed in Australia every year. Many people who are still working after a terminal diagnosis do not realise they can access their life insurance benefit immediately.
How This Differs From a TPD Claim
It is worth understanding why this question comes up so often. The answer lies in the difference between a terminal illness claim and a TPD claim.
A Total and Permanent Disability (TPD) claim is assessed on your functional capacity. The test is whether your condition has permanently prevented you from working in any occupation for which you are reasonably suited (the "any occupation" definition) or from returning to your specific occupation (the "own occupation" definition). Employment status and work capacity are central to TPD eligibility.
A terminal illness claim is assessed on your medical prognosis. The test is whether your condition is likely to result in death within the relevant timeframe, regardless of whether you are currently working.
These are different claims, assessed under different parts of your super fund's policy. A person who is still working may qualify for a terminal illness benefit even if they do not yet qualify for TPD. Equally, a person who has stopped working due to their condition may qualify for both.
Better Claim reviews both eligibility streams as part of every initial assessment, because the answer to one question does not determine the answer to the other.
Does Continuing to Work Affect My Claim in Any Way?
Not in terms of your eligibility for a terminal illness benefit. Your right to claim is based on your diagnosis and prognosis, not on your work status.
There are a few adjacent considerations that Better Claim discusses with every claimant who is still working:
Income protection claims
If you also hold income protection insurance through your super fund, this benefit is linked to your income. It typically pays a portion of your pre-disability income when you are unable to work due to illness or injury. If you are still working, your income protection entitlement may not be triggered yet. However, once you are unable to work, income protection can begin and, importantly, can run concurrently with a TPD claim assessment. Better Claim reviews all three streams for clients who hold all three types of cover.
TPD eligibility in the future
If your condition progresses to a point where you are permanently unable to work, a TPD claim may become available in addition to the terminal illness benefit. These can be pursued separately. The terminal illness benefit you receive does not prevent a later TPD claim unless your policy contains a specific interaction provision. Better Claim reviews your policy terms and advises on this.
Tax on the benefit
Terminal illness benefits paid from superannuation are generally tax-free regardless of age or employment status. This is one of the advantages of claiming through super rather than through other means.
Impact on your super balance
Receiving a terminal illness benefit does not directly affect your accumulated super balance. The life insurance payout comes from the insurer, not from your own super savings. The separately recognised condition of release under the Superannuation Industry Supervision Act may allow you to also access your super balance, but this is a separate decision and can be made independently of the insurance claim.
What Your Super Fund Won't Tell You
Super funds are not required to advise you on your eligibility when you continue working after a terminal diagnosis. They process claims when they are lodged. The initiative to claim rests entirely with you or someone acting on your behalf.
Here are things your fund is unlikely to raise without being asked:
Continuing to work does not disqualify you from a terminal illness claim and your fund is not required to flag this.
You may hold life insurance across multiple super funds, including old accounts from previous employers. Each fund holds a separate benefit. Each claim must be lodged separately.
If your super balance was transferred to the ATO as unclaimed super, the insurance cover does not transfer with it. The ATO lookup tool helps identify which original fund held the balance. The claim must be made against that original fund.
The sooner a claim is lodged, the sooner it can be assessed and paid. There is no advantage to waiting until your condition progresses.
Your employer does not need to be informed that you are making a terminal illness claim through super. The claim is a private matter between you and your super fund's insurer.
50% of Australians do not know their super includes insurance cover. Among those who know, a significant number incorrectly assume that employment status affects their terminal illness eligibility.
Do You Qualify for a Terminal Illness Claim?
If you have received a terminal diagnosis and are still working, here is a simple way to assess whether you may qualify:
Has your super fund held life insurance cover in your name? Check your most recent annual super statement or log into your member portal.
Has a doctor assessed your prognosis as likely death within 24 months (or 12 months under some policies)?
Is there a specialist in your condition who would be willing to certify that prognosis?
If the answer to all three is yes, you are likely eligible to lodge a terminal illness claim now, regardless of whether you are working.
Better Claim provides a free eligibility review for people in this situation. We check your fund's policy, confirm your coverage, and advise on the certification requirements before any paperwork is involved. Check your eligibility here
Step-by-Step: How the Claim Works While You Are Still Employed
The process for a terminal illness claim is the same whether you are working or not. Here is what the process looks like:
Identify your super funds. Better Claim locates all super funds and life insurance policies in your name, including old accounts.
Review your policy. We check the terminal illness definition and prognosis threshold in your fund's Product Disclosure Statement.
Coordinate your medical certification. You need two registered medical practitioners to certify your prognosis. At least one must be a specialist in your condition. Better Claim coordinates this with your treating doctors.
Prepare your documents. Required documents include certified copies of your medical reports, a certified copy of your government-issued photo ID (passport or driver's licence), and the completed certification forms. Better Claim prepares all claim forms and reviews every document before lodgement.
Lodge the claim. Better Claim submits all documentation to each relevant insurer and records the lodgement date.
Manage the assessment. We track your claim and manage all insurer correspondence. If additional information is requested, we handle it.
Receive the outcome. If approved, the benefit is paid as a lump sum directly to you. You do not need to stop working to receive the payment.
REALISTIC TIMEFRAMES
Simple claims with complete documentation: 4 to 8 weeks from lodgement
Claims requiring additional evidence: 8 to 16 weeks
Complex or disputed claims: 3 to 6 months
Better Claim manages the entire process so you can continue working and focusing on your health without the administrative burden.
Why Claims Are Delayed or Declined
Waiting too long to lodge. There is no benefit to delaying a terminal illness claim. If your prognosis meets the threshold today, your eligibility does not improve by waiting. And in some cases, delays in lodging a claim can make certification more complicated as a person's condition progresses.
Incomplete medical certification. The certifying practitioners must specifically address the prognosis threshold using precise language. Wording that falls short of "likely to die within 24 months" gives the insurer grounds to request further documentation.
Incorrect forms. Each super fund has its own prescribed forms. Better Claim uses the correct forms for each fund.
Missing documents. Certified identification, specialist reports, and clinical notes must all be included at lodgement. Missing documents cause delays.
Unidentified super funds. Old super funds from previous employers may hold separate life insurance policies. Missing them means missing a benefit. Better Claim traces all funds as part of the initial review.
A declined outcome is not the end of the process. Better Claim manages internal reviews and AFCA appeals where they are warranted.
How Better Claim Can Help
Better Claim works with Australians in all stages of a terminal diagnosis, including those who are still working, still receiving treatment, and still managing full lives alongside their diagnosis.
We understand that lodging an insurance claim while maintaining your work life adds another layer of complexity. Our process is designed to require as little of your time and energy as possible.
Our service includes:
Free initial eligibility review across all super funds
Policy review and threshold confirmation
Direct coordination with your medical team for certification
Completion and lodgement of all claim forms
Ongoing claim management and insurer liaison
Review of declined outcomes and AFCA appeals where applicable
Better Claim works on a no-win, no-fee basis. You pay nothing unless your claim succeeds. Our fee comes from your settlement only.
Frequently Asked Questions
Do I need to tell my employer I am making a terminal illness claim?
No. A terminal illness claim is a private matter between you and your super fund's insurer. Your employer has no involvement in the process and is not informed unless you choose to tell them.
Can I receive the terminal illness payment while still on a salary?
Yes. The payment is a lump sum from your life insurance policy. It is not affected by your current income or employment status.
What if my condition improves after I lodge the claim?
If your claim is already lodged and the insurer has not yet made a decision, your updated medical situation may affect the outcome depending on the policy terms. If your claim has already been approved and paid, you are generally not required to repay the benefit if your prognosis changes. Each situation is specific and Better Claim advises on individual circumstances.
Can I claim TPD later if my condition worsens and I can no longer work?
Potentially yes, depending on your policy terms and whether a TPD benefit has been extinguished by the terminal illness payment. Some policies allow both claims independently. Better Claim reviews the interaction provisions in your specific policy as part of the initial assessment.
Can I make a claim if I work part-time or casually?
Yes. Employment type, hours, and income are not factors in terminal illness eligibility. The prognosis test is the determining criterion.
How much does Better Claim charge?
Better Claim works on a no-win, no-fee basis. There is no charge for the initial eligibility review or any part of the claims process. Our fee is deducted from your settlement only if your claim is successful.
Your Next Step
If you have received a terminal diagnosis and you are still working, you may be entitled to access your life insurance benefit through super now. Your employment status is not a barrier. Your prognosis is what matters, and if it meets the threshold, your claim can be lodged today.
Better Claim provides a free eligibility review, coordinates your medical certification, and manages the entire process from start to finish. You pay nothing unless your claim succeeds.
You have already been through enough. Let Better Claim handle the paperwork.
Resources
AFCA (Australian Financial Complaints Authority): Free dispute resolution if your terminal illness claim is delayed or denied
ASIC MoneySmart: Super and Insurance: Overview of life insurance and terminal illness benefits held through super
ATO: Early Access on Terminal Medical Condition: ATO guidance on accessing super early due to a terminal diagnosis
Palliative Care Australia: Support and information for people with terminal illness and their families
Disclaimer: The information in this article is general in nature and does not constitute legal or financial advice. Terminal illness benefit terms vary between super funds and insurers. Better Claim recommends seeking professional advice specific to your circumstances before making any decisions about your claim.
