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Life Insurance

Do You Need Trauma Insurance? (And Some Key Tips for Finding the Right Policy)

11 Jun 2021

Life Insurance by Life Stage

The choices you make today can impact your long-term health, wealth and happiness. Understand the important role Life Insurance can play in key life events.

Trauma cover is a type of insurance that you can buy to help protect yourself and your family.

Life is full of twists and turns, who knows when they might not be able to work anymore because of a medical condition, and might need some financial assistance?

There are many reasons why a person might not be able to work anymore. A severe injury or illness comes to mind. In those situations, it can be increasingly difficult to support yourself and your family. That is without factoring in medical costs or rehab expenses.

This is where Trauma Insurance comes in. It’s a specific type of insurance that provides benefits if you are diagnosed with a serious illness condition which is listed in the terms of the trauma cover.

With this cover, with most insurers, you’ll receive a lump sum cash payment that  helps you pay your medical costs and other expenses. You can use the lump sum as you choose – for example, living expenses, therapy, and even clearing debt. You may even consider using the proceeds of a claim to modify your home.

But do you need Trauma Insurance? In many lines of work, it’s often considered a good idea. You may also need it if your health insurance doesn’t cover a lot. It’s also useful if your family stands to suffer as a result of your condition and the limitations it creates, such as your inability to work.

Ultimately, there are many reasons why it might be a good idea to pick up Trauma Insurance.

Cover for a Range of Unexpected Expenses

Trauma insurance can also help cover the costs of various treatments for serious illness conditions, such as cancer. As you may know, cancer treatments can sometimes lead to a variety of other challenges. Some include breast reconstruction surgery, or even fertility treatments.

These treatments aren’t always covered adequately by standard health insurance. But with good Trauma cover​, you may be able to cover some or all of those expenses with the lump sum you receive if you suffer one of the medical conditions covered by the policy.

50% of Australians Are at Risk of Chronic Disease

Chronic disease is another reason you may want to think about a financial safety net. Chronic diseases are a serious problem in Australia, with around 50% of the population at risk.

You may want to check your family medical history for a proper assessment. Figure out if, sometime in the future, you may not be able to work for a while, or at all. If your current job doesn’t allow you to make it through on savings alone, then trauma insurance might be a good idea.

You’ll need to ensure you answer all questions during the insurance application process honestly and completely

3 Tips for Finding the Right Policy

Getting Trauma Insurance can take time. There are many insurance providers in Australia, each with their own distinct policy terms and pricing. Here are some tips that can help you find a suitable policy for your unique situation.

Tip 1. Ask the Key Financial Questions to Figure Out How Much Cover You Are likely to Need

Before you input anything into a ​Trauma Insurance calculator​, ask yourself how much you need to cover. To do this, add up your financial obligations, such as living expenses, debt repayments and childcare. Also, keep in mind that insurance calculators should only be used as tools to help you think about what cover levels you may need.

Then figure out what’s already covered by the other types of insurance you already have, and in what circumstances that other insurance will pay out a claim. List your debts and savings to get a clear picture of your financial situation. It can help give you an idea of how much you need to get from your trauma coverage.

Tip 2. Choose Between a Standalone and Bundled Policy

Often, trauma insurance cover is available as an option which can be taken bundled together with term life insurance cover. In this case, what usually happens is that the insurer deducts the trauma claim from your life insurance claim. A bundled policy may however be cheaper.

That said, after your death, the beneficiaries of your term life cover will likely receive less money if you had previously made a claim on a trauma policy taken as an option with your life policy. While a standalone policy may be pricier, it may also pay a higher benefit. And it doesn’t have to affect any of your other policies.

Tip 3. Understand That Trauma Insurance Only Covers the Conditions Listed in the Policy

Before signing up for Trauma Cover, you will need to understand that not all conditions have coverage. Typically, only the specific conditions listed in the policy are covered; and you must meet the definition of the listed condition in order to be able to make a successful claim as a result of suffering a medical condition. That’s one reason why it’s often best to check your medical history as mentioned above. You should find out if you have a higher risk of getting specific illnesses.

Also, talk to your insurer and get the list of covered conditions.. Read the fine print in the PDS too, because if a condition that’s not on the list happens to you, you won’t be able to make a successful claim.


Is Trauma Insurance Worth It?

Trauma Insurance may be of more value to some people than others. It all depends on what medical risks or occupational hazards you face. And what falls under covered conditions with various insurance companies.

Like with any other type of insurance, a Trauma Insurance  claim may help you get out of a tight financial situation. It can provide many benefits to you and your family.

Do you need Trauma Insurance?

That is a question that only you can answer. You may choose to get some professional advice, or to carefully consider your own needs and circumstances and deal directly with a Life Insurer like NobleOak who can provide you with general advice and product information.

This is general information only and does not take into consideration your individual circumstances, objectives, financial situation, or needs. You should carefully consider the Product Disclosure Statement before making a decision on a life insurance product.

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