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What is Trauma Insurance?
Trauma insurance pays you a lump sum on the diagnosis of a specified non-pre-existing illness or injury, generally including heart attack, stroke, cancer, and paraplegia.
‘Would your family be able to maintain their lifestyle if you suffered a serious illness and, while unable to work, faced substantial medical and rehabilitation expenses?’
If your answer to this question is no, you need to consider transferring that financial risk to an insurance company.
Your financial adviser can help you do that, as well as answer any questions you have about trauma insurance, and then calculate how much trauma insurance you need to safeguard you and your family in the event something should happen to you or your spouse.
And, if you wish, your adviser will use our sophisticated computer program to ‘broker’ the major insurers to find you the right cover at a competitive price.*
What is trauma insurance typically used for?
If you become seriously ill, a trauma insurance payout can help you cover costs that you may not be able to afford otherwise, such as:
Medical treatment, pharmaceutical items, specialised therapies, and rehabilitation costs that are not covered by your health fund
Modifications to your home arising from the disability (e.g. replacing stairs with ramps)
Additional disposable income
Paying for extended time off work (so you can fully
recover before you return to work)
Standalone or linked policy?
You can choose a ‘standalone’ trauma policy or a trauma policy that is ‘linked’ to your life insurance policy.
A ‘linked’ policy is generally cheaper than a ‘standalone’ policy.
With ‘standalone’ cover, if you make a claim, other insurance cover you have with the insurer won’t be affected.
With ‘linked’ cover, if you make a trauma claim there may be an equivalent reduction in your linked Life insurance benefit.
Caution on policy definitions
You should choose a policy which defines ‘trauma’ in a way which suits you.
Some policies cover a broader range of medical conditions than other policies. And some policies pay out in the early stages of illness while others wait until later before they pay out.
How do the insurance companies view you as a risk?
Some insurance companies may charge you significantly less than other companies for the same cover, simply because they see you or your occupation as a lower risk.
You should use the specialist services of a financial adviser who can find the most cost effective and appropriate cover, tailored to your individual needs.
Case Study
John is married to Lisa and they have three children and a mortgage. John is employed, Lisa is a stay-at-home mother.
Despite the fact that John has income protection insurance, the couple is concerned that, should John suffer a serious illness, the family could be in trouble financially.
We would recommend that John purchases enough trauma insurance to cover significant medical and associated costs should he suffer a trauma.
His cover should also allow for the repayment of their debt as well as to top up the payments he would receive from his income protection policy.
We would also recommend that Lisa takes out trauma insurance
The Facts
| 138,000 |
In 2018, an estimated 138,000 new cases of cancer will be diagnosed in Australia, with that number set to rise to 150,000 by 2020.
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| 69% |
69% of cancer patients in Australia will survive more than five years after diagnosis2
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| 65% |
65% of stroke survivors suffer a disability which impedes their ability to carry out daily living activities unassisted.
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475,000
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In 2017, more than 475,000 people are estimated to be living with the effects of stroke. This is predicted to increase to one million by 2050.
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$5 billion
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Strokes cost Australians an estimated $5 billion every year.
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Cancer Council Australia (2018) Facts and Figures https://www.cancer.org.au/ about-cancer/what-is-cancer/facts-and-figures.html viewed December 2018.
Cancer Council Australia (2011) Facts and Figures https://www.cancer.org.au/ about-cancer/what-is-cancer/facts-and-figures.html viewed December 2018.
Stroke Foundation (2018) Facts and figures about stroke https://strokefoundation. org.au/About-Stroke/Facts-and-figures-about-stroke Viewed December 2018.
• If you have certain pre-existing conditions, you may not be able to obtain trauma insurance.
This information has been produced by Australian Unity Personal Financial Services Ltd (‘AUPFS’) ABN 26 098 725 145, AFSL & Australian Credit Licence 234459. Any advice in this document is general advice only and does not take into account the objectives, financial situation or needs of any particular person. It does not represent legal, tax, or personal advice and should not be relied on as such. You should obtain financial advice relevant to your circumstances before making investment decisions. AUPFS is a registered tax (financial) adviser and any reference to tax advice contained in this document is incidental to the general financial advice it may contain. You should seek specialist advice from a tax professional to confirm the impact of this advice on your overall tax position. Nothing in this document represents an offer or solicitation in relation to securities or investments in any jurisdiction. Where a particular financial product is mentioned, you should consider the Product Disclosure Statement before making any decisions in relation to the product and we make no guarantees regarding future performance or in relation to any particular outcome. Whilst every care has been taken in the preparation of this information, it may not remain current after the date of publication and AUPFS and its related bodies corporate make no representation as to its accuracy or completeness. Published: November 2018 © Copyright 2018
