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What is trauma insurance, and do I need it?

In Australia most people have heard of life insurance, health insurance and income protection, but trauma insurance (also called critical illness insurance) is less well known. However, trauma insurance is an important component of a comprehensive personal insurance plan. Trauma insurance pays you a lump sum benefit upon diagnosis or in the event of a large number of medical conditions including cancer, heart attack, stroke, coma, Parkinson’s disease, motor neurone disease, muscular dystrophy, multiple sclerosis, Alzheimer’s disease, severe burns, paralysis, loss of limbs and blindness. The lump sum benefit can be used however you choose, but can cover medical costs, rehabilitation and therapy costs, mortgage repayments, transport costs, home modifications and general living expenses.

Here is more information about trauma insurance:

1.      What is the purpose of trauma insurance?
Trauma insurance is designed to provide you with a lump sum benefit if you are diagnosed with a serious medical condition or you experience a serious accident to help pay for your medical expenses, rehabilitation expenses and other living costs. Medicare and private health insurance can cover many medical expenses, but there can be significant gaps in cover. Income protection can help cover living expenses if you are unable to work, but income protection policies only cover a percentage (e.g. 70%) of your income. Trauma insurance can help to fill these gaps. Additionally, if you don’t have private health insurance or income protection, it is even more important to consider trauma insurance.

2.      Paying premiums
Trauma insurance must be paid out of your pocket and cannot be paid from your Super as trauma insurance does not meet the conditions of release from Super. For this reason, you are not able to obtain trauma insurance directly from a Super fund like you can for life & TPD insurance, and income protection.

3.      Underwriting and guaranteed renewability
Trauma insurance policies are generally purchased through an adviser and are fully underwritten and guaranteed renewable. Fully underwritten means to take out a policy you need to provide information including your income, your medical history, your occupation, and your pastimes. The underwriting assessment at time of application rather than at time of claim increases the chance of claims being paid. Guaranteed renewable means that your policy cannot be cancelled, and premiums cannot be increased due to any change in your health, occupation, or pastimes. Additionally, if your health, occupation, or pastimes change, no exclusions can be added to your policy.

4.      What happens with a trauma insurance claim?
In order to qualify for a trauma insurance claim, you need to be diagnosed with medical condition listed on your policy. Once you have a diagnosis the next step is to contact your adviser (or your insurer if you don’t have an adviser). Claim forms will also need to be completed by you and your doctor to provide information regarding your claim. At claim time, it is definitely to your advantage to have an adviser, who will be your advocate and help you through the process.

Cyber Liability Insurance is designed to help protect you from claims and support your profitability in the event of a cyber breach or attack.

Public Liability insurance is there to provide protection if someone makes a claim against the insured, the business or its employees.

A business insurance pack can provide cover for your business premises and contents, against loss, damage, theft or financial loss from an insured interruption to the business.

In order to qualify for a trauma insurance claim, you need to be diagnosed with medical condition listed on your policy. Once you have a diagnosis the next step is to contact your adviser (or your insurer if you don’t have an adviser). Claim forms will also need to be completed by you and your doctor to provide information regarding your claim. At claim time, it is definitely to your advantage to have an adviser, who will be your advocate and help you through the process.
 
General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.


Craig Muldoon, Stress Free Insurance, ABN 68655178377, AFSL Community Broker Network

This article originally appeared on Stress Free Insurance Blog and has been published here with permission.

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