Part 4 - What is Trauma Insurance, and is it the same as Health Insurance?
Trauma (or Critical Illness) Insurance provides you with a lump sum you are diagnosed with a specified medical condition such as cancer, heart attack, or stroke. The benefit amount in most circumstances will help to cover costs associated with diagnosis, treatment, and recovery from the trauma event.
Why is Trauma insurance important?
How much Trauma insurance should I have?
The appropriate amount of cover for you will depend on both your family and financial situation. However, there are certainly some items that are worth considering when determining the level of cover you require.
Can I link this policy to my Life Policy held inside Super?
Yes, Flexi-linking of Trauma insurance allows the life insured to obtain a Trauma benefit held outside of superannuation linked to a life benefit held within superannuation, helping reduce the cost of the trauma insurance. Note that if you claim on your trauma insurance, your life benefit will be reduced by the claimed amount unless you have the life buy-back option.
What is the difference between my Health Insurance and Trauma Insurance?
Trauma Insurance is not designed to replace your existing health insurance. Trauma insurance is designed to take away the financial burden if you are diagnosed with a critical illness such as a stroke, heart attack, or diagnosed with a type of cancer, etc., as it provides you with a lump sum amount to use as you wish.
Private health insurance helps cover the cost of diagnosis and treatment of a critical illness, but it is a widely held belief that if you have private health insurance, all of your medical costs are covered, which unfortunately is not the case. Trauma insurance can often fill the gap that is left with private health insurance.
So how do can I pay for my Trauma Insurance?
Due to Superannuation law, you cannot fund these premiums through your superannauiton and therefore need to be funded from your cash flow. Unfortunately, these premiums are not tax-deductible either.
Like with all personal insurances, you can generally choose to pay for TPD insurance with either:
What do I do now? I hear you ask.
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Terrell Hyman the Director and Principal Advisor at Trl Financial Solutions.