Reinstatement options
Trauma insurance reinstatement is an optional benefit where you can repurchase 100% of your trauma insurance 12 months after a claim benefit is paid.
Once reinstated, your trauma insurance policy will typically exclude the traumatic event you previously claimed on. Despite the exclusion, a reinstatement option offers greater protection should you suffer a different trauma in the future.
One point to note is that the insurance reinstatement option may allow you to make a full claim, depending on your traumatic event. This means that a reinstatement option does not reduce your sum insured.
How many times can I reinstate my trauma insurance?
Providing that you have purchased the reinstatement option, it depends on the definitions and what is outlined in the product disclosure statement.
However with that said, most insurers in Australia allow you to reinstate the sum insured on your policy once, therefore you would only be able to claim on a policy a maximum of 2 times.
Will I have to provide additional medical information to reinstate my trauma insurance policy?
Generally all insurers in Australia do not need you to go through any medical assessments when you reinstate the sum insured in your policy; though generally speaking this is the main reason you would want to take out a reinstatement option in the first place. However it would be prudent to check the definitions outlined in a product disclosure statement before making your final choice.
Is this the same as a trauma insurance buy-back option?
No. A buy-back option allows you to purchase the 'life cover' or 'death benefit' component of a joint life and trauma policy back.
Jenny's trauma insurance reinstatement experience
Jenny is 35, owns a catering business, and is happily married to David with whom she has 2 children with.
Jenny and David first spoke to their adviser after their first child. Their adviser suggested they both apply for a trauma insurance policy with a reinstatement option, as well as a standard life insurance policy. Luckily Jenny and David took on the advice, because two years later she was diagnosed with a small malignant tumour on her breast.
Since her policy's definitions covered this type of cancer, Jenny was able to make a claim. After receiving the benefit payment, David was able to hire a baby sitter to help look after the children while Jenny was in and out of hospital for surgery and a rigorous regime of chemotherapy. The surgery and treatment were successful and Jenny was cancer free. Twelve months later Jenny's policy was reinstated without the need for a medical assessment.
The next few decades were fortunately happy and healthy for Jenny and her family. However after Jenny's fifty first birthday, Jenny suffered a heart attack. This event prompted a second trauma insurance claim. Without the trauma insurance reinstatement option, Jenny would not have been able to make a second claim.
Who offers trauma insurance policy reinstatements?
Most insurers in Australia offer a reinstatement option. If you would like a complete list, or would like to have a reinstatement option on your policy, speak to an xLife adviser today for free trauma insurance quotes.
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save up to 20% on your first year's trauma protection premium.
December 2010
