Trauma Insurance

Is also known as Critical Illness Insurance

What is it ?

Trauma Insurance pays a lump sum in the event that you suffer a medical trauma that impacts your life and lifestyle. Over 50 different trauma events may be covered including diabetes, Alzheimer’s disease, loss of limbs, stroke, heart attack, cancer, and brain tumours
In the event of a trauma, you and your family can use the lump sum to:

  • Pay for life style changes and rehabilitation. Some medical conditions can affect your mobility or cause disablement and you may need to purchase items or modify your home to help you cope with these changes,
  • Allow you, and your partner if necessary, to take some time off work to assist in recovery, and
  • Pay off debts

Trauma insurance is not a replacement for income Protection Insurance or private health insurance.
It’s designed to help pay off debts and the costs of rehabilitation. You could use the money to pay for specialists or medical bills, make modifications to your home, pay off your mortgage or cover rental payments.

Do products differ across different insurers ?

Different products from different insurers cover different conditions. It is important to consider the definition of each condition when selecting which product to purchase. Many companies will offer both basic and comprehensive policies(that cover a broader range of medical events)
Make sure you read the insurer’s product disclosure statement(PDS) carefully to see what conditions are included and excluded.

How much does it cost ?

Trauma Insurance is relatively more expensive compared to other forms of life insurance. Like other life insureance products, Trauma Insurance premiums can vary according to:

  • Age(premiums may increase or cover decrease as you get older)
  • Gender (women generally claim higher amounts so pay higher premiums)
  • Whether or not you smoke
Case Study
Situation : 45 year old couple with two teenage kids and a $150,000 mortgage with the father earning $90,000 a year and the mother providing full time home care. The father suffers a stroke and is unable to work indefinitely , and is physically and mentally restricted.Trauma Insurance pays him $500,000 allowing the family to pay off the mortgage,refit the home to allow for greater mobility,pay for a carer and provide an initial income stream.
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