3 Important Aspects of Trauma Insurance.
On face value, personal insurances can seem pretty simple. You insure yourself for an event, and if said event occurs you make a claim. But as insurance companies strive to differentiate themselves, policy options and definitions have made personal insurances more complex.
In this article we look at Trauma insurance. We have picked out three aspects that we see as important when assessing your cover.
What is it?
Trauma cover is all about supporting your recovery from a serious illness – helping you afford the treatment of your choice and allowing you to make necessary changes to your lifestyle. When you’re looking at trauma cover, there are 3 key things you need to understand so you know what you’re covered for, and what that means at claim time:
- What you can claim for – Trauma definitions
- How your cover is structured – Stand-alone or linked
- Making multiple claims – Trauma reinstatement
1. Trauma definitions
Every trauma cover policy comes with a list of definitions that dictates:
- what medical conditions are covered by your policy
- how severe those conditions need to be for a claim to be paid
- what percentage of the sum insured will be paid in the event you suffer one of the covered conditions.
Generally speaking, trauma cover is designed to cover you for severe conditions that are likely to require expensive medical treatment, a significant recovery period and/or force you to make major lifestyle changes.
For example, you may be diagnosed with skin cancer that hasn’t spread and is treatable in one procedure. Or you may be diagnosed with aggressive skin cancer that requires chemotherapy or radiotherapy for months. They’re both technically ‘skin cancer’, but they’re very different in terms of their impact on your life.
You can find the trauma definitions that apply to your policy in the Product Disclosure Statement (PDS), with many of these definitions now standard across the life insurance industry. It is worth reviewing and understanding the differences between policies to ensure you get the best cover for you and your loved ones.
2. Linked covers
Trauma cover may be purchased as a stand-alone policy or as a ‘linked policy’ connected to your life or TPD insurances.
Generally linking policies reduces premiums, but there are implications at claim time. Say you have a $200,000 trauma cover policy linked to a $500,000 life cover policy. If you make a successful claim on your trauma cover, your life cover benefit will reduce by the $200,000 paid out (i.e. to $300,000).
Depending on your situation you may be eligible to buy back this extra life cover at some point, but it’s important to note that your life cover is significantly reduced in the meantime.
3. Trauma reinstatement
A little-known benefit of trauma cover is that you may be able to make multiple claims in your lifetime.
That’s because some trauma cover policies offer a trauma cover reinstatement option after a successful claim. A reinstatement option allows you to recommence your policy, typically 12 months or more after a claim has been paid. Typically a reinstated policy won’t cover you for the same medical condition you already claimed on, or a related condition, but it can still cover you for a wide range of other serious illnesses.
Learn more about Trauma insurance and it’s exclusions in the Product Disclosure Statement, otherwise speak to your financial professional.
Want to know more?
If you’d like to discuss your Trauma policy, or how Trauma insurance can be used to protect you and your family contact us to organise a No Obligation Discovery Meeting.
