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What is Trauma Insurance and Why Do You Need It?

Everyone knows about life insurance. Many people know about total and permanent disability cover. Some even know all about income protection cover. But one kind of insurance that often slips between the cracks is trauma insurance. In the insurance industry, trauma insurance is a relative newcomer, having been in existence for around thirty years.

What is Trauma Insurance

But make no mistake; trauma insurance is a great policy to have and may be the one on which most Australians are the most likely to collect. So, what is trauma insurance and why do so few Australians know about it?

Trauma Insurance: How It Works

Trauma insurance provides you with a lump sum payment in the event that you suffer a traumatic illness. Each insurer has a different list of what conditions they deem payable, so you should choose your provider carefully.

By the Numbers

We mentioned that trauma insurance is the insurance that Australians are the most likely to collect. So, what conditions generate the most claims? According to the AMP website, in 2011 their trauma insurance claims were paid in this ratio:

30% of claims were for cancer not including prostate, bowel or breast cancer. Breast cancer generated 27%, prostate cancer 11% and bowel cancer 6% of claims. This puts cancer at a total of 74% of all trauma insurance claims. Heart attacks accounted for 10%, heart disease for 8% and strokes for 2% of claims. Parkinson’s disease was responsible for 1% of claims and other conditions for 5%.

Why You May Need Trauma Insurance

Income Replacement

As expected, a traumatic illness usually causes one to miss work. The lump sum payment that the policy provides can be very helpful and it will allow you to concentrate on your recovery and spending time with your family. Remember that your living expenses don’t stop when you become ill. Trauma insurance can be valuable in helping you keep your household expenses current while you recover.

Debt Repayment

Often, the effects of traumatic illness are permanent. That makes it difficult for many to return to work in their former capacities. For some, return to work is part time or in a less strenuous position, resulting in less money. The payment can help you pay down or pay off your mortgage or other long-term debt.

It’s Worth a Phone Call

To learn more, call (08) 6462 0888.