TAL and super fund IOOF adequately compensated a widow for delays assessing a terminal illness benefit, the financial services ombudsman has ruled.

The woman’s financial adviser complained the wrongful denial of the claim and a poor claims handling process financially burdened the woman while she was distressed following her husband’s death.

The adviser sought a payment of $15,000 to $20,000 to cover the expenses of pursuing the claim.

The husband held insurance in superannuation when he was diagnosed with cancer in August 2022. He died in August the next year.

His insurance had lapsed in January 2023 due to non-payment of premiums. In October 2023 his widow lodged a posthumous terminal illness claim.

TAL declined the claim in February 2024, saying the man had not met the policy’s definition of terminal illness while he held cover.

The Australian Financial Complaints Authority says that after receiving further medical information, the insurer offered the insured $291,491 on an ex-gratia basis; the trustee paid the sum in July 2024.

The woman’s financial adviser said the benefit should have been paid in December 2023, and the widow had to return to work to cover mortgage payments and incurred costs because of the prolonged and stressful claims process.

TAL and IOOF agreed delays were made in assessing the claim. TAL paid interest and IOOF paid compensation.

AFCA says the complainant was paid the full terminal illness benefit and both insurer and trustee adequately compensated her.

Read the determination here.