Trauma Insurance (Critical Illness Insurance)

Trauma Insurance (Critical Illness Insurance)

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What is Trauma Insurance?

Trauma Insurance, also known as Critical Illness insurance, is a type of insurance policy that provides a lump-sum payment in the event that you are diagnosed with a specified critical illness or experiences a traumatic event. This can include a heart attack, cancer, stroke, dementia, and many other predefined events. These events will differ between policies.

This lump-sum payment is typically made upon diagnosis of the covered condition, regardless of whether or not you are able to work but must meet the definitions of a Trauma event as outlined in your insurance policy.

One key difference between Trauma insurance, compared to TPD or Income Protection, is that there is no work test. That is, the payment is made on the diagnosis and/or treatment of a specified medical event rather than your ability to work, so generally a Trauma claim will not result in a TPD claim.

Why is Trauma Insurance Important?

Many of these Trauma events are all too common – most people will have a friend or family who has suffered a Trauma event. Due to the temporary nature of these events (in many cases), no claim is generally payable under a TPD policy. Therefore, if you don’t have funds to draw upon in a Trauma event, then this can have an immediate financial impact of your life as well as your family’s lifestyle.

Having Trauma cover in place will provide you with financial support for the short term so you can adjust your lifestyle habits that potentially caused the Trauma event as well as have the time to properly recover so there is less chance of having a secondary trauma event.

What Should Trauma Insurance cover?

Trauma Insurance may cover items such as:

  • Short-term debt repayments,
  • Medical costs including specialised treatment,
  • Nursing or in-home care,
  • Care for children, or
  • Home or vehicle modifications.

Importance of seeking Financial Planning advice for Trauma Insurance

It’s important for individuals considering Trauma Insurance to carefully review the terms and conditions of the policy to understand which conditions are covered, any exclusions that may apply, the waiting period before benefits are payable, and the amount of coverage provided. Additionally, premiums for Trauma cover may vary based on factors such as age, health status, occupation, and lifestyle habits.

To obtain Trauma Insurance that holds appropriate policy definitions and is cost effective in comparison to the market then speak to Sterling Grange Financial Planning to receive expert professional insurance advice.

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