What happens in the case of a debilitating accident, critical illness, or injury? Trauma insurance offers relief that ensures certain medical emergencies will not also be calamitous to your family's finances.
- What is trauma insurance?
Also known as Recovery Insurance or Critical Illness cover, trauma insurance covers certain illnesses, and injuries that are debilitating, potentially even fatal, and have a significant impact on a person's life and their ability to work. For instance, cancer, a stroke or serious injuries arising from a motor accident.
- Where can I get it?
You can purchase Trauma Insurance directly through insurance providers who offer this type of cover. TAL lets you build your own cover package online according to your needs.
- Is it included as part of my superannuation?
Don’t expect to find trauma cover in your super fund. Due to change in law, this kind of cover has not been offered to new members since July 2014. If your super fund offered trauma coverage before this date, call to find out if you are still covered.
- Do I need trauma insurance?
While it’s not pleasant to ponder if you will be diagnosed with any of the illnesses or injuries covered in trauma insurance policies, it is always advisable to think ahead and imagine how your family will manage financially if you are no longer able to provide a stable income through working.
Consider what kind of savings, private health care, and back up plans you have in place. This includes reviewing other insurance policies you may have such as income protection, life insurance (including through your super), and total and permanent disability.
When deciding on your level of cover, think of how much money your family will need to stay afloat on a day to day basis, as well for bigger ticket items such as mortgage payments and educational expenses. It’s also worth thinking about how much support you have in your community, or from relatives who may be able to help out in an emergency. Alternatively, are you eligible for any government payments or workers compensation – and will this be enough in a worst case scenario?
- How do I pay for it?
As with other insurance covers, you can choose between stepped) or level premiums. Stepped Premiums means that the amount you pay in premiums increases each year as you get older. Level Premiums means that the cost of your cover is based on the age you were when you gained the cover. You can still have the cover adjusted to keep pace with inflation – the cost of that new cover will be added to the cover each time inflation is applied. Indexation applies to both Stepped and Level Premiums As with any insurance policy, do your research before signing on the dotted line.
- What is Inflation Protection?
If you have Inflation Protection selected on your policy, both stepped and level premiums will increase with inflation so that your cover stays relevant to the rising costs of living. Inflation Protection adds incremental increases (usually 5%) to premiums, but your family’s future is safeguarded at the same value of cover you began with. Check your policy for more information on this.
- How does it pay out?
Trauma insurance pays a set amount. You can use this in several ways:
- To cover medical costs not covered by a private health provider, including specialty therapy
- As a form of income if you are no longer able to work
- To cover the cost of moving into a new living situation caused by the trauma
- For debt repayment so your family is not left struggling.
- What else should I know?
Your insurance company will most likely request the medical records relating to the event or illness that has necessitated your claim. Your claim may be turned down if this information is not provided
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