It was originally developed in the 1980s when advances in medicine meant that people having a major medical trauma would recover, but would not receive a payout under their Total & Permanent Disablement Insurance, as they would return to work after a number of months of treatment and were not permanently disabled. Most Insurers cover around 30 different medical conditions; heart attacks, strokes, cancer and bypass surgery make up approximately 95% of all Trauma Claims1.
Trauma Cover payouts can be used in a number of ways, such as pay down of some debts, pay for a spouse to take time off work to care for you, pay for any private medical costs above health insurance, pay for adjustments to your home or even to chase alternative overseas medical treatments or to just take a holiday.
A great example is of my father who had a heart attack some years ago and although he had full Private Health Insurance, the bills for ongoing rehabilitation were well into the thousands. My mother had to take time off work to care for him, which was not covered by any type of insurance.
The last thing anyone needs when having health stresses is to have financial stresses also.
The unfortunate statistic is that the chance of suffering a trauma insurance insured event prior to age 65yrs is – 1 in 2 for a male and 1 in 3 for a female2, which makes the likelihood of us claiming on these policies quite high. One strategy to consider for people aged 45yrs or below, is to structure your Trauma Insurance with a Level Premium rather than a Stepped Premium. Reason being, is that although the Level Premiums are higher in the earlier years, in the later years when the likelihood of a medical condition is higher (ages 55 – 65yrs) you will be paying a much lower premium if a Level Premium is selected.
For more information on Trauma Insurance or any other Insurance please contact Cotter Financial Services on 07 3333 2610.
Penned by Ryan Dobbrick for Healthy Living Ipswich. The information provided is general in nature and does not take into account your particular investment objectives, financial situation or insurance needs; we therefore recommend you seek advice tailored to your individual circumstances before making any specific decisions. Cotter Financial Services and its advisers are Authorised Representatives of Fortnum Private Wealth Pty Ltd ABN 54 139 889 535 AFSL 357306 T/A as Fortnum Financial Advisers.
1. Data provided by AVIVA which shows their claims paid for Trauma Insurance between 2004 and 2008
2. Source: Pricing Dread Disease Insurance – Institute of Actuaries of Australia March 2002