What Is TRAUMA Insurance?

The third piece of the life insurance puzzle is Trauma Insurance. Sometimes called ‘Critical Illness’ cover, this form of insurance pays out a lump sum benefit upon the diagnosis of a serious illness.

Which illnesses are covered will be explained in the PDS for each product. Be sure to read them and compare them - or make sure that your adviser has done their homework.

Details, Details, Details

Knowing the details of your insurance policy is important with each of the four forms. But it’s really important when it comes to Trauma cover.

Different insurers will have different definitions for the Big Three - heart attack, stroke and cancer. Look for the broadest definitions you can get on the Big Three.

What’s It For?

Trauma insurance is perhaps the most relevant for younger people, because the statistics are against them, unfortunately.

The most common claims are for the ‘Big Three’ - Cancer, Stroke and Heart Attack.

  • 1 in 3 men and 1 in 4 women will be diagnosed with cancer in their lifetime. (Half will live more than 5 years after diagnosis)
  • 50,000 Australians have a heart attack each year.
  • There is a stroke event in Australia every 12 minutes.

Sure, there’s the chance it won’t happen to you.

But I don’t like those odds.

Peace of Mind Ain’t Cheap

Trauma Insurance is relatively expensive, compared to the other 3 forms of cover.

The biggest things that will influence the price are: your age, smoking status, height/weight, medical history and family history.

The moral of the story? Get it when you’re young and stay in for the longhaul.

Because odds are, you’ll have to claim on it one day.

Trauma insurance, when you get down to it, is there to allow you the chance to take time off work, focus on recovering and spend time with your family.

Thanks to advances in medicine, even over just the last five years, survival rates for the Big Three keep going up. Trauma insurance is there to get you through the worst of it and make sure you can get back to your life as soon as possible.

You’re Covering For Two Now

When thinking about how much cover you need, don’t forget to allow for the possibility of your partner taking time off work to care for you while you recover.

A year away from work can mean a big drop in their income - do you want to provide for this in your Trauma cover?

Continue reading: What is Income Protection Insurance