Trauma Insurance

Also called Critical Illness or Recovery Money

Pays a lump sum in the event of a traumatic event happening to you, for example you suffer a stroke, heart attack, major burns or are diagnosed with certain cancers through to traumatic events such as the loss of a child.

This insurance came about due to advances in modern medicines and its ability to cure and prolong the lives of those who suffer a traumatic event.

Due to these advances it was found there were many people who were suffering a traumatic event which in previous years would have resulted in a payout of their Death, TPD or Income Protection but due to modern medicines new abilities these payouts were not being triggered but the insured was still left with medical bills and other costs which put them under financial strain, thus the insurance industry came up with Trauma Insurance.

Using a real life example, a healthy person was on a treadmill at the gym when he suffered a heart attack. He was taken to hospital but was back at work in 6 weeks. Due to the fact that he was not disabled he could not claim on his TPD insurance, he had not died so there was no life cover payment and he was not off work long enough to see out the waiting period on his Income Protection, but he still had bills to be paid, luckily he had trauma insurance which paid him a lump sum.

You can also tailor Trauma insurance to include cover for TPD and Death. In some instances the premiums on Trauma can actually be cheaper when including Death cover, rather than just having Trauma insurance by itself.

The types of premiums structure
  • Stepped Premium – As you age, the risk of something happening to you increases, stepped premiums increase each year to reflect this.
  • Level Premium – Start out more expensive in most cases, but have already had your future risks factored in to them. In the long run they are often a less expensive option. We often recommend a level premium, due to the fact that the later years of your life are the times that you will need the insurance the most. At this stage of your life, you may also be questioning the cost of a stepped premium, and wondering whether it is worth holding the insurance.
The most important thing is getting the insurance policy in place. You may choose to change aspects of your policy at a later stage.

Are You Adequately Covered?

Did you know the following facts:

  • For every home lost through fire, there are 4 homes lost through death AND 48 homes lost through disablement.
  • Of working age Australians 25,870 will die and 4-5 times more will suffer a dreaded disease, every year
  • 36,750 will die of cancer and 261,402 will be diagnosed with cancer.
  • 1 in 2 Australians will suffer a critical illness during their lives.
  • 4 out of 5 disabilities are due to illness
  • For every person killed on Australian roads 26 are injured in automobile accidents.
  • Of the accidents which result in people aged 25-64 being injured, more than 52% of them happen away from work.
  • One third of Australian workers will be disabled from working for at least 3 months before the age of 65.

* MLC research

* Aviva – Protecting womens health & wealth

Women are just as susceptible as men when it comes to critical illnesses as shown below:

Women aged 36-64 are open to all sorts of critical illnesses.

  • 89% of consumers have motor vehicle insurance — 87% of consumers have home contents insurance — 77% of consumers have home building insurance — 14% of consumers have life insurance
  • 6% of consumers have income protection insurance — 5% of consumers have TPD protection
  • 2.5% of consumers have trauma insurance

* Comminsure research

Every insurance policy is different, to determine exactly what is covered you should check your current insurance schedule or the Product Disclosure Statement of the proposed insurance. We would urge you to contact this office to undertake a full review of your current insurance arrangements to make sure they are suitable for what you want to protect against.