Q: I have a family member who has recently been diagnosed with terminal Cancer, they are 52.  They have life insurance cover through their Superannuation fund but no disability benefit.  Are they able to access their Superannuation and Life Insurance benefits before they die?

A: A superannuation fund member can generally access their superannuation benefits if they are diagnosed with a terminal illness in which they are likely to die within 12 months.

To receive a benefit, the member must have their condition and life expectancy certified by two doctors of which one must be a specialist practicing in an area related to the illness.

In the May 2015 Federal Budget, the government announced proposed changes relaxing the life expectancy criteria by extending the time criteria from 12 months to 2 years. These changes, if legislated, are proposed to take effect from 1 July 2015.

Early access to Life Insurance benefits on the basis of Terminal illness will be subject to the policy wording issued by the Life Insurance company attached to the Superannuation fund. So please check the applicable features and benefits under the contract.

The proceeds of lump sum superannuation benefits (with or without insurance) as a result of a terminal medical condition are tax free.

Follow Andrew on Twitter @AndrewHeavenFP. This article was originally published in The Australian