Making a claim for terminal illness payment is “not a straightforward matter” with reimbursements often rejected for a variety of reasons, according to a specialist lawyer.

Insurers usually reject a claim because the insured “is not terminally ill enough”, has not kept up with the premiums or is too old when the claim is made, Carroll & O’Dea Lawyers Special Counsel Evelyn Garnett wrote in an article published on the Mondaq content platform.

In situations where a payment is denied because the insured is not terminally ill, she says it could be due to a doctor’s assessment that chances of recovery are good based on available treatment options.

She says it is also possible for a person to be terminally ill and die but never receive their benefits during their lifetime because of the policy definition and prognosis at the time of claim.

In such cases, the payout will be a death benefit to the family instead of the insured who may wish to access the funds during their life.

She urged policyholders to review their insurance coverage and read the fine print of policy documents to understand the situations in which benefits will or will not be paid.