Trauma insurance was introduced into Australia in 1986, therefore it is a reasonably recent addition to the suite of personal insurances that are available on today’s insurance market. It is sometimes referred to as critical illness insurance or recovery insurance. No matter what you care to call it, it is what is known as a ‘living’ insurance in that you don’t have to die before your beneficiaries are able to gain access to its benefits. In this case it is you who will receive the cash lump sum payment when you are diagnosed with having a certain medical condition.

There is a long list of medical conditions covered but the types of conditions change with different insurers. The most common to all trauma insurance policies are that of cancer, heart attack, coronary bypass and stroke. Although you could recover and live a healthy life once again, trauma cover claims have to be based on a severe condition at the time. It differs to income protection insurance in that it pays a lump sum payment on diagnosis, and the illnesses or injuries paid out on have to be specific medical conditions according to the policy. Medical conditions not mentioned will not be covered. Trauma insurance may therefore be the only option for people who are not employed.

Trauma Insurance is Important if You Have Large Debts

It is the type of insurance that is most valuable to people who have large debts such as a mortgage or business and are of pre-retirement age. A critical illness can be as financially devastating to a family as can the death of a breadwinner. As the inability to provide for the family anymore has the same effect. With trauma insurance you will be able to focus on recovery and not be held back with financial stress worries.

Features and Benefits of Trauma Insurance

The benefits of taking out trauma insurance are many as none of us know what awaits us in the future, but with trauma insurance in place you will at least have peace of mind in the knowledge that if the worst was to occur neither your family or yourself would suffer financially as a result.

Some of the obvious benefits include the following:

• A stress-free holiday. The shock of diagnosis and recovery from any necessary operation can be eased when you can afford to take a restful holiday knowing your finances won’t be over stretched when doing so.
• Changing your old lifestyle to fit in with your new circumstances. Being informed by your doctor that you are suffering a serious illness can often mean you won’t be able to live the same as you did previously. You may find you will have to reduce the hours you have been working. You may need to hire help. Whatever the changes may be at least you will have the finance available to do it.
• Rehabilitation and ongoing medical care. Although Medicare, or your private health insurance, may have covered a lot of your medical expenses, there might be the opportunity of getting specialised care overseas, or the chance to be involved in a certain rehabilitation program. If you have sufficient individual funds available to take advantage of these opportunities you could recover faster and even extend you life expectancy.
• Relieving day to day living pressures. Whatever your prognosis, your ongoing lifestyle will be improved dramatically if you have eliminated any financial stress from the equation. The last thing you want to worry about as you face your new future will be money. Trauma insurance can guarantee this can become a fact.
• Create a financial back up plan. Having acquired trauma insurance will give you the confidence of going ahead with your plans for the future for you and your family. You will be able to rest assured that no matter what happens your plans will still be carried out and your whole family will be better off as a result.

How Much Trauma Insurance do You Need?

The amount of trauma insurance needed is a purely individual thing as all families are different. You will either have to make your own appraisal here or seek the advice of a financial advisor. The sort of things you will have to take into account however will depend on the following:

• The amount of income you are earning now and what you will expect to earn in the future. If this income is to be lost completely or partially, it will need to be replaced. You will have to decide how this to be done. You could invest it to earn an income or you could add it to your savings and live off it.
• The debts you can reasonably expect to hold at different stages into the future. All debts have to be repaid therefore if those debts were removed you would release more cash flow to more easily live on. You will need to ascertain the amount needed to pay off these debts.
• The make up of your family. The number of dependants you are responsible for is integral to the amount of money you will need should you suffer from a traumatic event. Life must go on, therefore you will need to make money available to care for those you care for.
• The number of assets you have in the form of property or shares. Some of these assets can be sold to make life easier for you. You will need to determine whether these assets are better sold or kept as security for later on in life. Once again a financial advisor is best placed to advise you on these matters.

Trauma insurance is important, just as important as life insurance. The main difference being that you will be alive to share the benefits with your family should you unfortunately suffer from one of the medical conditions listed as a traumatic event on your policy. It is truly a living insurance.