Trauma insurance in Australia is designed to protect you in the event that you are diagnosed with a serious medical condition or disease such as stroke, heart attack or cancer. Trauma insurance is also known as critical illness insurance and pays a lump sum upon medical diagnosis of a condition or disease as defined in an insurers product disclosure statement (PDS).
How does trauma insurance work?
You are entitled to a trauma cover benefit payment when you meet the definition of a traumatic event as outlined in the trauma insurance policy. Depending on an insurers policy, a claim can be made after 14 days of surviving a traumatic event; however this time frame varies from company to company. After these conditions are met, you are paid either a lump sum or partial payment depending on the terms and conditions as outlined in your product disclosure statement (PDS), and which traumatic event you have suffered.
Types of trauma insurance policies in Australia
Many basic trauma insurance policies offered in Australia are similar, however what differs are the definitions of conditions and diseases, and the types of extra benefits you can choose to pay extra for. These extra benefits cover more conditions and diseases, rather than just the basic ones.
Who should have a trauma insurance policy?
Trauma insurance is a vital part of any risk plan, regardless of whether you are the main breadwinner or not. For example, figures have shown that women are five times more likely to make a trauma insurance claim than a life insurance claim (1). Could your family survive if the maternal member of your family suffered a traumatic event? Your family may struggle to come to terms with the house keeping and child caring duties often placed in a woman’s care, not to mention medical costs, house hold bills, credit card debt, and mortgage repayments.
Also, if your family has a history of certain conditions or diseases, trauma cover could help pay for living expenses and medical bills in a time of great financial need.
Medical conditions covered by trauma insurance
There a number of medical conditions and diseases covered by trauma insurance in Australia. These conditions and diseases and their definitions will vary between insurers, so it is imperative that you read and understand the meaning of each medical condition and what is, and is not covered by your trauma policy.
Basic trauma insurance cover:
- Alzheimer’s disease
- Aplastic Anaemia
- Benign Tumour of the Brain or Spinal Cord
- Cardiac arrest
- Chronic Kidney Failure
- Chronic Liver Disease
- Coronary Artery Bypass Surgery
- Heart Attack
- Heart Valve Surgery
- Loss of Independence
- Loss of Limbs or Sight
- Loss of Speech
- Major Head Trauma
- Major Organ Transplant
- Medical condition requiring life support
- Medically Acquired HIV
- Motor Neurone Disease
- Multiple Sclerosis
- Muscular Dystrophy
- Occupationally Acquired HIV
- Parkinson’s Disease
- Primary Pulmonary Hypertension
- Severe Burns
- Surgery of the aorta
- Triple Vessel Coronary Artery Angioplasty
Extra trauma insurance cover:
- Adult insulin dependent diabetes mellitus
- Burns of limited extent
- Carcinoma in situ (CIS)
- Chronic lymphocytic leukemia
- Malignant melanomas
- Partial blindness & deafness
- Prostate tumours
- Severe endometriosis
- Systematic lupus erythematosus (SLE) with lupus nephritis
How much does trauma insurance cost?
The cost of cover will depend on a number of factors however an insurer will usually base standard premiums on the following:
- Smoking status; and
If you already suffer from a medical condition or disease, your insurer may decide to place a loading on your premiums, resulting in higher costs.
If you decide to purchase any additional benefits your premiums will also increase. However this option may be well worth it considering that extra conditions and diseases are covered.
Trauma insurance quotes & advice on trauma cover
If you are in doubt over which trauma policy to purchase, speak to an xLife adviser. An xLife adviser can compare the top policies available in Australia and offer you free trauma insurance quotes. Our experienced advisers also specialize in difficult cases where there are pre-existing medical conditions.
Source: 1. MLC Claims Statistics 2008