subject: The 3-Minute Guide to Trauma Cover [print this page] The 3-Minute Guide to Trauma Cover The 3-Minute Guide to Trauma Cover
Trauma cover is a far less common insurance option than either life insurance or income protection insurance. However, it can offer much needed relief for those who do not work, for those who have irregular work, or those who can't afford ordinary income protection cover. Trauma cover is also especially suitable for those who have family history of a particular illness or condition.
Does trauma cover have any other names?
Yes, trauma insurance might also be called critical illness insurance. There may be an option or rider within your life insurance policy or income protection policy that gives you cover for 'critical illnesses' or 'trauma events' - these are forms of trauma cover also.
What's insured with trauma cover?
Trauma cover pays you a lump sum if you are diagnosed with one of the 'listed conditions' in the policy.
How do they define 'trauma?
'Trauma' is defined differently by every company. Where some companies list up to 40 different conditions eligible for claims, some companies only list four. Reading the PDS is absolutely essential in the case of trauma insurance, as the lowest quote is certainly not necessarily the best deal.
What benefits are paid?
With some trauma insurance providers you can choose your own sum insured; however it is more common that there are different categories of illnesses that have different benefit amounts attached to them.
When are benefits paid?
If you meet the insurance company's definition of a particular illness or condition (for example, cancers must be above a particular stage and size in most cases), and you make it past the survival period (if applicable), you will normally receive a benefit in 14 days.
How does trauma cover interact with taxation?
Trauma cover premiums are paid from your after tax income and are not tax deductible. As such, any benefits paid are not subject to taxation.
What features and variables affect trauma cover rates?
The major variable which affects trauma insurance rates is the number of conditions for which the insurance company is prepared to pay you. The second-biggest impact on your overall bill will come from your choice of stepped or level premiums. Other features and benefits are usually insurer-specific. For example, you may be able to attach a children's trauma option to your plan, you may want to guarantee your future insurability, or you may want to be able to get your trauma cover back once a payout has been made with a trauma reinstatement option.
The last factors that influence your premiums are the usual ones such as:
