You may ask, what is Trauma Cover?

Trauma Insurance provides a lump sum payment to cover immediate needs when a critical illness or injury occurs.

Trauma cover falls between Total Permanent Disability (TPD) and Income Protection. Where TPD may not be claimable in the event of some illnesses and injuries due to the requirement of permanency to the injury, and Income Protection helps to replace your income where you cannot work. Trauma cover provides a lump sum payment to assist with your immediate medical and financial needs in the event of a critical event.

Each policy will differ in terms of the conditions that are insured, however typically included is standard various cancers, heart disease, heart attack and stroke. Further to these common conditions, there are several other diseases that may also be included depending on your policy and insurer. The Product Disclosure Statement (PDS) for a policy will detail what conditions are covered, your financial adviser will also be able to assist in advising which policy is best suited to you.

How much Trauma Cover should you have?

This is something your financial planner can assist you with determining, and the amount of cover you have will depend upon both your personal and financial situation. As a basic guide, trauma cover may be used to:

  • Provide a lump sum for immediate medical needs involved in treatment and recovery
  • Pay off any personal debts such as a mortgage

There are two main ways in which to take out Trauma Cover; either through your adviser or directly through the insurer. Trauma Insurance is the only Personal Insurance policy which must be paid personally, this is due to the policy not meeting release requirements of a Super Fund and therefore not always being able to be paid directly to the insured party.

To speak to a qualified Financial Adviser about your insurance options, contact the Superannuation Advice Australia team.