Terminal illness: Why you need financial advice

Being diagnosed with a terminal illness is one of the most traumatic events you could ever go through. In many cases it’s also completely unexpected, so with the exception of existing insurance policies such as income protection, life insurance and trauma cover, you won’t have planned for it.

Obtaining financial advice during this difficult, emotionally-challenging time is extremely important, particularly if you will be leaving dependent family members behind. A financial planner can assist you to structure your affairs in order to maximise your situation for the benefit of your dependents in the future.

Specifically, there are four interrelated areas that should be addressed under these circumstances.


Where income protection, life insurance or trauma insurances are in place, there is a strong likelihood of benefits being paid out in the event of terminal illness. The timing of benefit payments between policies may vary, so it’s not only important to understand how much each policy will provide, but when such amounts will be received. Once this is known, a strategy can be put in place for the most effective use of insurance benefits. Such a strategy may consider immediate medical expenses, regular household expenses, repayment of debt and investment for the future benefit of your dependents.

However, before any of this takes place, your claim needs to be lodged with the insurance company (or companies). This is often an involved process which requires completion of a claim form and provision of medical records as confirmation of your condition. Additionally, the insurer may request further information from your treating doctor or specialist. A financial planner typically employs a ‘hand-holding’ approach during this time and will guide you through the claims process and liaise with insurance companies on your behalf.

Asset structuring

Assets are commonly owned solely, jointly, as tenants-in-common or via a company, trust or self-managed super fund (SMSF). Each of these structures gives rise to a range of factors that need to be assessed when considering the needs of your beneficiaries. Some structures will be suitable, others will not, and it’s important the correct structures are put in place as early as possible for your own peace-of-mind, and that of your beneficiaries.

Tax planning

Tax planning strategies will be determined by a number of factors including the income you earn currently, the assets you hold (e.g. shares, property) and the income they produce, how your assets are owned, how long assets have been owned and your age. Additionally, tax planning strategies need to be considered once your assets pass to your nominated beneficiaries, and such strategies need to satisfy the needs of beneficiaries too (e.g. do beneficiaries need income, capital growth or a combination of both and will this change over time?). Addressing your tax position now will go a long way to ensuring you maximise your estate for beneficiaries later on.

Estate planning

Your estate plan effectively ties all the areas above together. The decisions, structures and strategies stemming from the above areas will largely determine how your Will and other estate planning documents are drafted. In other words, such documents will put your wishes into force for the benefit of your beneficiaries. This is the final step.

So if you are suffering from a terminal illness and have a dependent family, we recommend seeking expert advice for your own – and your family’s – peace of mind.


This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial and tax advice prior to acting on this information.Opinions constitute our judgement at the time of issue and are subject to change. Financial Planning Expert Pty Ltd does not give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document.
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    Financial Planning Expert is an independent financial planning business based in Melbourne. We provide genuinely independent and conflict free financial advice. We’re experts in self-managed superannuation fund (SMSFs) advice and strategy, retirement planning, property and share investment advice, life and income protection insurance, tax planning, asset protection, estate planning and advice for Australian expatriates.