Trauma cover is a type of life insurance designed to protect you if you have been diagnosed with or are suffering from a critical illness, such as stroke, cancer, or heart disease. It pays you a lump sum benefit to help you get the best medical care which money can buy.

If you have a business and employees under you, giving them the same cover would enable them to have the same choice and benefit you want for your family. Moreover, it could benefit you in the long run when one of your employees will be diagnosed with a critical illness. Instead of shouldering the finances alone, which could be quite a strain on your finances, the benefits from the Trauma Cover would help them financially.

What Types of Illness Does Trauma Insurance Cover?

Introduced in Australia in 1983, Trauma Cover provides cover for up to 40 known critical illnesses which are considered life-threatening. The insured is paid a lump sum upon diagnosis to aid him for any extra medical expenses it would incur. The benefit is paid to you or your employees once the illness is confirmed, not until you die. The types of illness which are included in the Trauma cover are:

• Cancer
• Heart Attack
• Kidney Failure
• Lung Disease
• Multiple Sclerosis
• Muscular Dystrophy
• Severe Burns
• Stroke
• Alzheimer’s Disease
• Chronic Lung Disease
• Major Head Trauma
• Coronary Bypass Surgery

The list could vary from provider to provider but most will cover the major illnesses. Statistics have shown that four major conditions account for most claims – 62% for cancer, 13% for heart attacks, 11% for coronary artery disease and bypass surgery, 9% for strokes, and 5% is for the other conditions.

That is why you need to understand the level of cover your policy has in order to know its benefits and limitations. If you are not aware of this, it could cause denial on some claims in the future. Some reasons why a claim is denied are:

• You are claiming a cover that is outside the policy.
• You have a pre-existing condition that you have failed or did not disclose upon application.
• You have made a claim before the waiting period expires.
• You have made a claim for a condition which is not covered.
• The insured has committed suicide within 13 months of policy commencement.

Benefits of Trauma Cover for Your Employees

As a business owner, you have specific financial goals and objectives. Some of them may be to pay off your mortgage earlier, retire early, or establish a trust. Aside from this, you also have the responsibility of looking after the well-being of your employees.

Giving them trauma cover has certain benefits aside from the cover you give them for certain critical illnesses. The benefits could work both ways for you as an employer and them as your employees.

Your Benefits

• It promotes a good relationship between you and your employees.
• It provides financial assistance at a very critical time.
• It entitles you to some tax concessions in contribution
• It gives additional financial support.

Their Benefits

• It ensures financial aid.
• It provides financial support before and during recovery period.
• It gives them access to the best medical care.
• It boosts their morale knowing you care for them as an employer.

Additional Trauma Cover Features and Limitations

Some insurance providers have included Death Benefit in their Trauma Cover, which has the same benefit amount as the Trauma Cover. However, there is only one pay out option – the Death Benefit or the Trauma Cover. Moreover, some Trauma Cover includes a Total and Permanent Disablement cover; but it should be understood that the sum of the benefit claim will be reduced. In addition, most insurance providers offer big discounts if you purchase life cover as part of a Trauma package rather than buying it as a standalone option.

Another feature which can be included in a Trauma Cover is the buyback option, which is offered at an extra cost. Since only one payment should be made, the buyback option allows you to re-purchase the death cover component after a qualifying period of the benefit payment.

Furthermore, as all the other insurance types, the Trauma Cover has a waiting period with which to make your claim. In most cases, those which fall under the category of accidental trauma do not require a waiting period and are covered immediately.

Most insurance providers have imposed a waiting period which is usually up to 90 days for certain critical illnesses, such as cancer, stroke, and heart diseases. Being aware of the waiting period is particularly important when changing or replacing your policy as you may not be covered during the waiting period of the new policy on certain conditions.

Trauma Cover is very important for you and your employees. If you are not yet sure which is the right trauma cover for you, you could seek out a financial adviser to give you a strategy which would fit our needs and your budget.