TRAUMA INSURANCE (Critical Illness Cover)

What is Trauma Insurance?

Trauma or Critical Illness Insurance pays a tax free lump sum benefit upon diagnosis of a specified critical illness. The number of defined illnesses you are covered for can exceed 30, however, most common claims under a Critical Illness policy are for cancer, stroke, heart attack & coronary bypass surgery.

Why do you need Trauma Insurance?

We all know someone, perhaps a family member or friend, who has received treatment for cancer, suffered a stroke, heart attack or have required heart surgery. At some stage in our lives other critical illnesses or conditions can occur to us, our family or friends. Things such as quadriplegia, paraplegia, liver, kidney or lung diseases or major head trauma are among many conditions covered under a Trauma or Critical Illness policy.

A Trauma event or Critical Illness such as these can be severely damaging, both emotionally and financially to a family. Medical research indicates that people who have adequate financial support during a period of critical illness or injury, usually have a better chance of affecting a full and complete recovery.

Clearly, if you can avoid the additional burden of financial stress at a difficult time in your life, then it makes good sense to do so. Trauma Insurance gives you that peace of mind and can assist you and your family in the following ways;

1. Meet out of pocket medical expenses during treatment or rehabilitation
2. Repay debts such as mortgages, credit cards, personal loans
3. Allows time off work beyond your sick leave, to rest and recuperate
4. Provide capital to start an income stream or change your career

How much Trauma cover do I need?

Again this depends on your personal circumstances as everyone is different. As a starting point it is a good idea to consider an amount that will reduce your level of debt or provide you with an income equal to 2 years gross salary or taxable income. It would be an advantage, however, if Trauma Insurance is taken alongside Income Protection Insurance, as this would allow you more flexibility when determining the lump sum amount.

It is important to remember that with Trauma lump sum benefits you do not need as much cover as Life Insurance.

Is Trauma cover available for children?

Yes. Your children can be included under your Trauma policy. Some events which normally affect older age groups will be excluded. Naturally, the sum insured will be limited to a lesser amount, but premiums are also much lower.

Your good health is the most important asset you have.

If it is ever threatened by a serious illness or injury you need to be prepared.

Trauma or Critical Illness Insurance is often overlooked when we are preparing our personal risk insurance, however, the benefits of receiving a tax free lump sum amount after suffering a serious illness cannot be measured.

While Trauma or Critical Illness Insurance can be purchased on it’s own, in reality it should be considered in conjunction with other types of insurance to give you and your family complete protection and financial security when you need it most.

Here are some examples of what people have done with lump sum benefits paid as a result of a Critical Illness claim:

1. Reduce debts such as mortgages, credit cards, personal loans
2. Meet out of pocket medical expenses during treatment or rehabilitation
3. Time off work beyond sick leave, to rest and recuperate
4. Banked the money and started a children’s education fund
5. Appointed part time carer or housekeeper
6. Paid for a complete refit at home, following a stroke
7. Used the capital to start an income stream or change their career
8. Invested the funds for future use
9. Taken a luxury holiday after recovery, before returning to work.