At the time you buy life insurance plan, there will be a number of plan features and options that you can consider adding to your insurance. Usually these will come at an extra cost – so they are intended as additions to the usual range of features (like payment on terminal illness or an advance funeral payment) that are considered standard on most life insurance plans. One feature that can commonly be added to life insurance is known as a "terminal illness booster" benefit. We will take a look at how this works and consider whether adding this to your life insurance is a good idea.

First, with life insurance NZ you can select a lump sum, which is paid out in the event that the insured person passes away. With most insurers, the chosen life insurance sum will also be paid if the insured person is terminally ill (which is usually considered to be having 12 months or fewer to live). The way a terminal illness booster option usually works is that the insurer will provide an additional sum in the event of terminal illness – which means that the insured person will receive their chosen New Zealand life insurance lump sum and also the additional terminal illness amount. (In the event that the insured person dies suddenly and is not terminally ill, the insurer would only pay the insured amount – not any part of the terminal illness booster).

This extra amount can be very useful, as terminal illness can bring costs that are not provided for in the standard New Zealand life insurance sum. Two common examples are the need to take an extended period of time off work, or the need to make adjustments to a person’s home. If this type of needs were present, the additional life insurance sum provided by the terminal illness booster can be very useful to have.

This is the main benefit of a terminal illness booster – the costs associated with something like terminal illness can be very hard to predict, and so any extra life insurance NZ money received at such a difficult time can make a major difference to a person and their family. In a similar way, the extra sum could give the ability to do things like take a holiday or whatever other use the family thought was best.

Also, the additional cost of adding a terminal illness booster is usually quite low – as little as a dollar or so a month. For this reason, it can be a tempting addition to your New Zealand life insurance policies.

However there are a couple of considerations when deciding whether or not to add a terminal illness booster benefit when you buy life insurance policies. One is that the actual amount of the terminal illness booster tends to be quite low – for example it is often limited to around $100,000. This kind of sum can certainly make a difference if a claim is ever needed, however for many people it will be relatively low compared with the actual New Zealand life insurance sum they have insured. It is important to know the exact amount that the terminal illness booster would provide.

Also, it is often relatively low cost to add a sum like $100,000 to your proposed life insurance NZ lump sum. For this reason rather than relying on the terminal illness booster, it’s worth considering simply adding to your New Zealand life insurance lump sum – giving you a higher insured amount. So when you buy life insurance be attentive and check whether you have terminal illness booster feature.