Do I Need Trauma Insurance?

Although life insurance and health insurance are commonly known to everyone, trauma insurance is a policy that tends to fly under the radar. And that’s all the more reason you should find out more about it and discover if it’s a worthwhile insurance option for you.

Most people take out life insurance to ensure their loved ones are looked after when they pass away, and private health insurance is a common choice to cover most medical expenses. However, trauma insurance is just as vital and is often overlooked.

So why should you compare trauma insurance?

In this article, we explain what trauma insurance is, and outline its features and benefits to help you answer questions like ‘Do I need trauma insurance?’ and ‘How much does trauma insurance cost?’.


What is Trauma Insurance?

Trauma insurance (also known as critical illness insurance) is designed to provide you with a lump sum if you are diagnosed with a traumatic condition. The payment is made whether you are able to work or not.

The range of conditions you can be covered for is extensive and may include cancer, stroke, heart attack, Alzheimer’s disease and chronic liver disease just to name a few, depending on the policy you purchase.


What Will Trauma Insurance Cover?

The whole point of trauma insurance is to ensure you are financially secure while battling with a traumatic health condition. Because of this, the lump sum paid out to you can go towards a number of areas such as:

  • Medical or treatment costs that aren’t covered by your health insurance policy
  • Rehabilitation and therapy costs
  • Mortgage and debt repayments
  • Transport costs
  • Home modifications
  • Living expenses and household costs

What’s the Difference Between Trauma Insurance and Health Insurance?

Although many people think they’re fully covered for a traumatic illness under their health insurance, this usually isn’t the case. A moderate level of treatment, rehabilitation and expenses can be covered under most private health insurance policies, depending on your level of cover and extras chosen.

However, no matter what type of health insurance policy you have, it’s unlikely to include everything required to keep you financially stable.

Trauma insurance can plug the extra expense gaps not included in your health insurance policy.

Unlike health insurance, trauma insurance can provide the extra level of protection you need to cover all these costs completely including equipment and specialist therapy.

Trauma insurance even covers loss of income while you’re unable to work. This additional benefit is not included in health insurance policies.


Is Trauma Insurance Right for Me?

To be eligible for trauma insurance, you need to be an Australian citizen or permanent resident between 15 and 65 years of age. Beyond this, deciding if this type of policy is right for you largely depends on your current financial situation. Consider how you will pay for your regular expenses and medical costs while suffering from a serious condition.

‘Likelihood’ and ‘impact’ should also be considered.

How likely are you to develop a traumatic condition covered by this policy?

How much of an adverse impact will there be on you and your family financially if you were to have a traumatic condition?

Both of these questions need to be weighed up when making your decision.

Even if your current savings and assets could contribute towards these expenses, is it really going to be enough? It’s important to work out the amount of funds your family will need for day-to-day living expenses as well as debts and medical costs related to your ongoing care.

Taking  a serious look at your current living situation and finances along with your current level of cover from other policies will help you decide if this type of insurance is right for you.


How Much Trauma Insurance Cover Will I Need?

When working out how much trauma insurance cover you will need, you first need to consider how much money you and your family will need to get by day-to-day if you were unable to work due to sickness or injury. By adding up debts, medical costs and living expenses and subtracting any funds or other insurance policies that can contribute towards these costs, you will have an approximate figure that may represent the ideal amount of cover to suit your specific situation.

You don’t necessarily need to purchase this amount of cover, however. Most people get enough cover to reduce debts, medical costs and household expenses without putting too much strain on their finances.

Keep in mind also that government benefits or workers’ compensation could also contribute towards your care and living expenses, so make sure this is factored in when working out how much cover you may need.


How Much Does Trauma Insurance Cost?

The cost of trauma insurance varies depending on factors such as:

  • Age
  • Gender
  • Quantity of cover needed
  • Occupation

Compare trauma insurance and get a free quote online with Cover Australia to receive a more accurate picture of how much this cover will cost you from Australia’s leading insurance providers.


What are the Policy Exclusions?

Before purchasing trauma insurance, you need to be aware of the exclusions that apply. Although these exclusions may vary slightly depending on the insurance provider, there are a few areas that often apply to most trauma insurance policies.

Death from suicide or intentionally self-inflicted injury will not be covered under this type of policy. However suicide clauses for trauma insurance are usually upheld for the first 13 months of the plan, after which it may be waived by the insurer. It’s also important to see which traumatic conditions and events are covered under the policy you purchase. If the condition you become inflicted with is not on the list, you won’t be covered.

A 90 day exclusion period also often applies to most trauma insurance policies. This means that a claim will not be paid within 90 days of:

  • The policy start date
  • The date an increase in cover has been applied
  • The most recent date a policy was reinstated

What Else Should I Keep in Mind When I Compare Trauma Insurance?

  • Consider whether you need stepped or level cover. Stepped cover has a premium that’s cheaper at first but increases over time while level cover remains at a consistent cost throughout the policy period. Despite this, the actual premium could still waiver over time due to inflation or insurer fee changes.
  • Trauma insurance is often more expensive than other insurance options because the policyholder is more likely to make a claim.
  • You don’t need to be working currently to take out a trauma insurance policy. That’s because this policy is related to the impact your traumatic condition will have on your life rather than your ability to work.
  • The lump sum payment from a trauma insurance claim is tax-free.

Compare Trauma Insurance with Cover Australia

Still asking the question “Do I need trauma insurance?” or wondering “How much does insurance cost?”. To find out more about how trauma insurance can benefit you, contact us on 1300 366 817 and speak with a trusted Cover Australia adviser.

Once you’ve decided that this type of policy is the right choice for you, compare trauma insurance with Cover Australia to see all your policy options and prices in one place. All our trauma insurance quotes come from leading Australian insurers and are tailored to suit the specific details you provide.

To begin comparing trauma insurance, click ‘Get a Quote’ today!

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