Trauma, also known as critical illness benefits, came into existence and effect in the early 1980’s and since its creation both clients and adviser have questioned its value and whether it could be substituted by just total permanent disability benefits (TPD) or if it is worth while to have both. Typically, people lean against not having trauma cover since it cannot be funded through your superannuation, however this does not mean that it should not be recommended. The question for Trauma should never be is it worthwhile to have, however it should be how much should be recommended to the client or individual, this is where an insurance needs analysis is vital and consulting with a financial adviser to find a cost effective product which will cover you for all your needs.

Unlike TPD cover Trauma is no way contingent upon either time off work or an inability to work for the insured, it is contingent on the insured suffering one of a list of clearly defined “events”, for example a few common events that fall into this category include; Cancer, partial blindness, some types of heart attacks and major organ transplants. The listed above events may not qualify for TPD as following recovering there is the ability to return to work, however they do potentially qualify for an immediate claim under the definitions of Trauma (subject to the time taken to obtain medical certification and whether the conditions meets the products defined events. Trauma also may allow for partial payments in events where individuals do not qualify for the full defined event, however, are partially effected, always refer to your product disclosure statement when analysing the these events. TPD is still important however, as it can provide a cost-effective strategy for protecting your ability to earn an in the long run.

Neither Trauma or TPD should ever be discounted and both should always be recommended to clients especially in 2020 when it is seen how frequent some of the defined events may be.

If you require help with understanding what’s best for you, the team at Superannuation Advice Australia can help.  Contact us today!