Trauma insurance, or critical illness insurance, is a type of insurance policy that is designed to offer benefits/payments in cases of serious illness and/or trauma. The most common conditions claimed under trauma insurance include:

  • Heart Disorders: Heart attack, open heart surgery, surgery of the aorta
  • Nervous System Disorders: Stroke, multiple sclerosis, paraplegia, coma, major head trauma
  • Body Organ Disorders:  Cancer, benign brain tumour, loss of speech, blindess
  • Blood Disorders: Occupationally/medically acquired HIV, aplastic anaemia (lack of blood cell regeneration)

Depending on the type of policy, health problems arising from accidents can also be covered. Trauma insurance is an important resource as it can help reduce financial stress for you and your family in the event you are unable to work for a period due to severe illness.

How does Trauma Insurance work?

Trauma insurance is paid in a lump sum amount if you are diagnosed with a debilitating disease like those listed above. Many trauma policies will cover around forty five major illnesses, though you will have to check the policy clauses carefully because each insurer has their own specification. It is up to you whether you want to choose just the severe trauma conditions or a more comprehensive cover that will also include partial payments for diagnosis and lesser health problems.trauma-insurance

Trauma insurance policies are often linked to non-superannuation life insurance policies because they are certainly an important aspect of life insurance and can reduce the cost of the cover. It is important to remember that any benefits paid under an insurance policy linked to life insurance will reduce the remaining level of life cover. However, you also have the option of taking out a standalone policy which will not affect your other insurance cover upon receiving a payout on your insurance.

You are also able to opt for the trauma reinstatement clause in the policy. This ensures that even if you make a claim on your policy, it will continue to be valid instead of being terminated at the time of insurance payment. However, keep in mind that this reinstated policy will not include the illness for which you have already claimed benefits.

Benefits of taking Trauma Insurance

Trauma insurance is most beneficial for those who do not have much financial buffer or assistance, like singles without families, those with small children or dependents, self employed people who cannot claim benefits from work, and home-makers. But in view of all the benefits it offers, trauma insurance can be helpful to anyone.

  • When you fall ill, it is a severe strain on your resources. It is also a very stressful time for you and your family. Under these circumstances, the last thing you need is to worry about returning to work or how to pay your day-to-day expenses. Trauma insurance helps you in times of critical illnesses and helps reduce stress, so that you can concentrate on healing.
  • Trauma insurance pays out a lump sum amount on diagnosis of a critical illness. This is actually very helpful because you have the money in your hands and can easily chart out a detailed plan on how exactly to use it. You will also be able to work out how long you can sustain yourself on the amount and start making alternative arrangements much early than usual.
  • Though you might have other regular medical insurance to pay for your healthcare, the amount received under a trauma insurance payment can be used for exploring different medical options, which might not be available under state-sponsored insurance schemes such as Medicare.
  • During times of illness, you will find that there are always some extra expenses that crop up because you are unable to function as well as before. Situations might arise where you may have to hire household help or pay someone to run errands for you. These extra expenses all add up over time and trauma insurance benefits can help pay for them.

It is important that you choose a benefit amount that is sufficient to cover medical expenses and household expenses because such grave illnesses might mean you will not be able to go back to work for a few months or even years. With the help of a planner, you can make a detailed plan of how much money you will require to carry on with some ease, and then take out cover that would guarantee this amount in case of a diagnosed illness.

Another important insurance to consider in conjunction with Trauma insurance is Income Protection insurance.

It is wise to consult a financial planner before taking out any insurance policy. There are a lot of things to be considered before signing on the dotted line. Sometimes, what appears sufficient today might not be enough to cover even basic costs ten years down the line. A financial planner will be able to calculate these costs and give an accurate picture of your requirements.



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Would like to speak more about trauma insurance?

Please do not hesitate to call the team at Acorn Financial Services for a no obligation and completely free consultation.

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