Trauma Insurance FAQs

What is Trauma Insurance?

Trauma insurance is one of the types of personal insurance plans offered to Australian buyers who want to protect their families from uncertainties. This type of life insurance plan falls under the life insurance bracket. Some of the other types of life insurance plans include total permanent disability cover, term life insurance cover and income protection cover.

 How is trauma insurance different from term life insurance?

Trauma covers protect the policy holder financially when he is suffering from a critical illness. These plans pay one large lump sum compensation amount when the policy holder is diagnosed with an illness such as cancer, heart problems or other types of terminal illnesses.

Term life insurance plans protect the family of the policy holder when the policy holder passes away either due to a known illness or unexpectedly. This type of policy will provide the one large lump sum compensation payment if the policy holder passed away due to natural causes, an accident or an illness. Term life insurance covers do not offer compensation payments for suicide attempts.

 How is trauma insurance different from income protection insurance?

Trauma covers offer the pre-decided compensation payment either upon diagnosis of the condition or after successful treatment of the illness. Survivors of cancer and other serious illnesses can benefit significantly from trauma illness plans.

Income insurance plans offer monthly compensation payouts that may be of a variable or fixed amount to the policy holder when he cannot earn a fixed income for a temporary period. This means that, income covers protect the policy holder financially if he is temporarily injured or ill and cannot go to work to earn a steady income.Income covers do not offer financial protection if the policy holder is critically ill.

 How is trauma insurance different from TPD insurance?

Trauma plans offer a compensation payment depending on the policy holder’s illness and the severity of the condition. The same rule applies to Total Permanent Disability plans. However; Total Permanent disability plans offer the compensation payment if the policy holder is disabled and has lost his limbs, vision or has lost use of his limbs and vision. TPD plans do not provide a compensation payment for self mutilation or disability due to any suicide attempts.

 How can trauma insurance help you and your family?

These plans can do two things for you and your family. These plans can provide enough money to the policy holder so that he can be comfortable when he is about to die and these plans can also give the policy holder enough money to leave something behind for his family. In the case of policy holders that survive the illness, the money from the compensation payout can be used by them until they are ready to step back into the world and start earning income again.

 How much compensation can I expect ?

Every insurer in Australia offers varying amounts of compensation for certain illnesses; however the type of illness along with the terms of the insurer and the cover limit will determine the final payout amount. In addition exceptions, premium loading fees and restrictions if any will also determine the final payout amount.

What are the 5 things I must remember before purchasing ?

  1. A waiting period may be applicable on trauma insurance plans and the number of days the buyer has to wait before the plan becomes active depends on the price of the policy and the pre-decided terms. If the buyer wants to wait only for 30 days instead of 60 days then he will have to pay higher premiums. If the buyer agrees to wait for 90 days instead of 60 days then he will have to pay lower premiums.
  2. Trauma covers can be purchased online by following a few easy steps such as locating an insurance comparison website, comparing 2 or more selected plans, getting quotes for the two or more selected plans and finally purchasing the plan that is most ideal for you.
  3. This type of insurance plan can be purchased directly from the website of the insurer however; insurers generally do not offer comparison services with other insurers’ plans nor do they offer multiple quotes.
  4. Before agreeing to purchase the lowest costing policy offered to you remember to read the terms and conditions of the plan and to go through the product disclosure statement at least once. The product disclosure statement will not only provide details about the terms of the policy, but also the limitations along with fee structure and premium payment details.
  5. If you opt for a trauma insurance plan or any other type of life insurance plan then you will be given a few premium payment options which include but may not be limited to stepped premiums and levelled premiums. Stepped premiums are a good option for you if you are young, want to take a policy for a reasonable period of time and need time to settle down before paying higher premiums. Levelled premiums are a good option for you if you are a mature adult, want to take a policy for a long time and do not want to pay increasing premiums as you grow older. Some insurers may offer a unique type of premium payment plan to certain term life insurance buyers and this plan is known as the blended premiums plan since it offers majority of the benefits of both stepped and levelled premium plans.Depending on your insurer, you may be given two or more options to pay your premiums, the easiest way to pay premiums is to log on to your insurance account online by visiting the insurer’s website and pay your premiums online. Some insurers may allow a quick payment method that may allow you to pay premiums without logging in to your account. Making premium payments via the phone and in person or via a check payment is always an option with most insurers in Australia.

  Income Protection Life Insurance

 

Related reading about trauma insurance

Superannuation and Trauma Insurance
Important Terms of Trauma Insurance Plans
Financial security can be guaranteed by personal insurance
Trauma Insurance vs Health Insurance