Umbrella: Trauma insurance protection

Trauma insurance: For when the worst happens

By insurancefocus,

With the medical advances of today, it’s often possible to survive major health problems like heart attacks, strokes, and cancer – but the financial costs involved are prohibitive. As well as the medical costs, there’s covering the time off work and the costs of rehabilitation. Illness and injury can strike at any age: if the unthinkable happens, are you prepared? Would you lose your life savings, or have to turn to the welfare queue?

What is your risk?

In fact, most families are carrying significant financial risk should the breadwinner be struck down by a serious illness or injury. If your answer to the question ‘Would your family be able to maintain their lifestyle if you suffered a serious illness and were unable to work?’ is no, it’s time to consider transferring that financial risk to an insurance company.

Did you know?

  • 114,000 new cases of cancer were diagnosed in 2010.
  • 60 % of cancer patients will survive more than 5 years after diagnosis.
  • 88 % of stroke survivors live at home, most of them with a disability.

Trauma insurance pays you a lump sum on the diagnosis of a specified non-pre-existing illness or injury, generally including heart attack, stroke, cancer, and paraplegia. This payout fees you up from financial worry and allows you to get well sooner by paying for things such as:

  • Meeting medical, pharmaceutical, specialised therapies and rehabilitation costs not coverd by your health funds
  • Paying for a carer
  • Funding modifications to your home that may be necessary due to permanent disability (e.g replacing stairs with ramps)
  • Repaying debt
  • Topping your income protection policy payments
  • Paying for extended time off work (so you can fully recover before you return to work).
  • Topping up your income if you decide to go back your work only on a part-time basis
  • Using your payment to create a cash reserve to boost your retirement savings or fund a family holiday.

Which Trauma Insurance policy is right for you?

You can choose from a ‘standalone’ trauma policy or a trauma policy that is ‘linked’ to your life insurance policy. Both have their pros and cons. While a ‘linked’ policy is usually cheaper than a ‘standalone’ policy, with ‘standalone’ cover, if you make a claim, other insurance cover you have with the insurer won’t be affected. With ‘linked’ cover, if you make a trauma claim you may see an equivalent reduction in your linked Life insurance benefit.

Different policies define ‘trauma’ in different ways. And some policies pay out in the early stages of illness while others wait until later before they pay out. Professional advice is essential to make an informed choice. To help you find a policy that suits you, get in touch with one of our Financial Planning experts, who can help you to make sense of the bigger picture.

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