Trauma (or critical illness) insurance provides a cash lump sum if you suffer a specified illness or injury (e.g. serious heart attack, stroke, cancer, kidney failure etc).
Advances in medical treatment have increased the need for trauma insurance because of the improved chance of survival after a trauma event. Whilst you are more likely to survive, you are also more likely to have large medical bills to pay. Trauma insurance is a way to ensure you have funds available to pay for medical treatment and take time off work to recuperate.
HOW MUCH TRAUMA COVER SHOULD I HAVE?
This will depend upon:
- Your financial commitments, and how long will they last
- Whether you want to repay your debts in full, or provide funds to cover the repayments for a period of time
- The estimated cost of specialist medical care
- Whether any assets be sold to help pay for expenses
- The amount of time you may need to take off work, and whether you will need additional money during this period.
- Affordability of the cover reflected on your Trauma Insurance Quote
You should also consider:
- Stepped premiums increase each year according to your age and the likelihood that you will make a claim and therefore they increase significantly as you get older.
- Level premiums are calculated based on your age when your cover starts. You can lock in a fixed rate for your insurance cover.
- Initially, level rates are generally higher than stepped rates but over the life of the plan as stepped premiums increase, level premiums generally do not*. This may represent a significant saving, meaning you can maintain your premiums more easily as you get older.
- *Level premiums are not guaranteed and may change in the future due to rate, CPI and policy fee increases. Level premiums can alter to stepped at various ages, please ensure you refer to the current PDS.
|Provides a cash lump sum that can be used to:||Pay for immediate care
Provide an income stream should you stop working
Repay any debt, or fund the ongoing repayments
Meet the costs of ongoing therapy, transportation and any adjustments to housing and lifestyle changes.
|Choosing a policy||The number of conditions covered under a trauma policy can vary, and it is important to consider the definition of each illness and injury when selecting which product to purchase. Our advisers will compare Trauma Insurance policies for you.|
|Stand alone policy or additional options||Trauma insurance is usually purchased as a stand-alone policy, however, it can be purchased with additional options, such as a Total and Permanent Disability (TPD) benefit. Trauma insurance is not available through superannuation.|
|Cost||Trauma cover is more expensive compared to other forms of life insurance because of the greater probability of a trauma event occurring. Care should be taken in choosing the product to ensure it includes the illness and injury cover that you feel meets your needs and circumstances.|
|Tax treatment||Premium Deductibility – Premiums are generally not tax deductible.
Taxation on Benefit Payment– Payments are tax free to the policy owner.