Trauma Insurance (or critical illness cover) pays a lump sum of cash if you suffer a serious medical incident. You may consider putting this money towards your recovery, take time off work…whatever you want, really. You should consider getting Trauma Insurance if…
- You want peace of mind for your family during a difficult time.
- Your health insurance doesn’t sufficiently cover the costs of traumatic health incidents.
What expenses could Trauma Insurance cover?
You should get enough trauma insurance to make up for any income lost while you recover. Consider how you’d pay for the following without your regular income, whilst ill.
- Mortgage repayments
- Credit card debt
- School fees
- Medical bills
- Household bills
What conditions does it cover?
There are upwards of 50 conditions that qualify as a trauma event. One insurer cites the following as the most common causes for claims.
- Cancer (62%)
- Circulatory diseases (e.g. heart disease) (24%)
- Nervous system diseases (5%)
- Other (5%)
- Accidents (4%)
According to the Cancer Council, Australian households cop an average of $47,200 in financial costs if someone in the house is diagnosed with cancer. As for circulatory diseases, heart attacks cost roughly $25,000 per incident, and strokes can cost up to $19,000 in the first year alone. None of these common conditions are cheap to treat or recover from, which makes Trauma Insurance all the more prudent a purchase.
How much does Trauma Insurance cost?
It depends on a number of factors. Do you smoke? What’s your family’s medical history? Your age, your gender, and more all contribute to the premium you pay for insurance.
Because of this, it’s very difficult to say how much it’ll cost. One source says a $250,000 Trauma Cover Benefit for a 35 year old male cost $601 per annum. This may not apply to your situation, but it gives you an idea of how much cover can cost.
What’s the difference between Income Protection, TPD and Trauma Insurance?
- Trauma Insurance is when you fall seriously ill, and is paid out as a lump sum.
- TPD Insurance covers you in the event you are permanently disabled, and aren’t able to resume work. It is also paid out as a lump sum.
- Income Protection acts as a replacement for up to 75% of your income. It is generally paid out regularly (e.g. fortnightly or monthly) for a period of time, in the event you are badly injured or critically ill and cannot go to work.
Is everyone eligible for this cover?
Most people can get covered by a Trauma Insurance policy, with a few exceptions and exclusions. For one, anyone with an existing condition may have trouble getting covered, depending on what it is.
The information provided here is general only and does not consider your personal objectives, financial situation or needs. Before you decide to purchase a product, it is important to read the relevant PDS.