Trauma Insurance – Are you covered if you suffer a Medical Condition like Cancer, Heart Attack or Stroke?

Trauma (also referred to as Critical Illness) cover provides you with a one-off lump sum in the event of sustaining a severe injury or serious medical condition. 

 You may be wondering why you might need a trauma insurance policy if you have private health insurance. If you have other forms of personal insurance that provide a much larger payout if something goes wrong, you may wonder why you need to bother with trauma cover? 

The answer to the first question is that trauma cover pays for rehabilitation, carers, other forms of treatment and loss of income that health insurance does not. The answer to the second question is that trauma is best seen as a complement to, rather than substitute for, these other forms of personal insurance:

  • Life insurance pays your dependants a lump sum if you die.
  • Income protection insurance replaces (most of) your salary for the period you are unable to work due to illness or injury.
  • Total and permanent disability (TPD) insurance provides you with a lump sum payment if you suffer an injury or illness that prevents you ever working again.

The lump sum payment can be used for things such as :

  1. Medical Costs above your Health Insurance
  2. Income is you are unable to work for a period of time
  3. Ongoing costs of any rehabilitation therapy and transport
  4. Adjustments to housing and lifestyle changes
  5. Debt repayments

Each Insurance company differs, however most Trauma Policies cover you for a variety of crisis events such as cancer, stroke,  heart attack, bypass surgery, kidney failure, loss of limbs and more. Most insurers also offer Trauma for children. Child trauma insurance also provides you with a lump sum payment in the event that your child suffers from a serious injury or illness.

Do I need Trauma Cover  –  A Small Outlay for a lot of piece of mind ?

If you have superannuation you almost certainly have some life insurance, TPD cover and possibly even income protection cover ‘baked in’, although the amount of cover is often low so you may need to buy a separate policy outside super. Trauma cover can only be purchased outside super, which brings us back to the issue of why bother. 

Take the 35-year-old who is paying $300 a year for trauma insurance. Let’s say he’s diagnosed with cancer. He has a life insurance policy but it’s not going to pay out anything unless it’s terminal cancer. He’s got TPD insurance but it’s not going to pay out anything unless the cancer is going to result in a total and permanent disability. He’s got income-protection insurance but that’s only going to pay out, after a waiting period, once proof has been provided that the cancer is preventing him from earning an income. 

With trauma insurance, there are no ifs or buts. Once the diagnosis is made, he qualifies for a lump sum payment of $120,000. That’s not going to set him up for life by any means, but it will allow him to cover medical expenses and pay the mortgage if he needs to, or chooses to, stop working for a while to concentrate on getting well. 

If, like our hypothetical 35-year-old, you have financial responsibilities and want the reassurance of a payout if you suffer an insurable health-related setback then trauma insurance may be for you. 

Avoiding being under or over insured is no simple task. If you’d like us to help you work out your insurance needs, give us a call. Contact Jodie Francese on 0755362288 or email