To put it simply, it’s a lump sum of emergency cash that can be paid if you’re diagnosed with a serious illness so you can focus on recovery without financial worry.

Most trauma policies cover around 40 specific medical conditions. To qualify for a payout, your diagnosis needs to meet the specific medical definition outlined in your policy for one of those conditions. The most common Trauma claims are for cancer and heart attack.

Zurich is one of Australia’s largest retail insurers[1] and in 2015 they paid $33,800,000 in trauma claims. For women, 80% of these were for cancer and 9% for heart attack with cancer accounting for 51% of claims for men and 24% for heart attack[2]. Most other Australian insurers have similar statistics.

Trauma insurance can pay a set amount (the insured benefit). Unlike health insurance which requires you to spend money and then get a rebate, trauma is paid as a lump sum and you can spend it on anything you need to deal with your medical condition. You may be eligible to claim on your trauma as well as your income protection for the same medical condition if it prevents you from working.

You don’t need to be working to apply for trauma insurance. This insurance is available from the age of 16 and your policy can remain in force until you turn 70.

What Conditions are Covered?

So, other than malignant cancer and heart attack what are some of the other conditions that are covered? Most policies also cover:

• Stroke
• Multiple sclerosis
• Motor neurone disease
• Parkinson’s disease
• Major burns
• Major head trauma
• Organ transplant
• Benign brain tumour
• Blindness
• Chronic kidney, liver and lung disease
• Dementia
• Advanced diabetes
• Paraplegia
• Occupationally or medically acquired HIV

Who should have Trauma Insurance?

If any of the following apply to you, then you could consider trauma insurance:

• You want the best medical care, regardless of cost or what your health insurance/Medicare covers
• You want to replace lost income while you’re not working
• You have school-aged kids and you’re the primary carer
• Your spouse would want to take time off work to look after you if you were diagnosed with a serious illness
• You have a mortgage
• You’re guarantor on someone else’s loan
• You’re single and are solely responsible for your financial security
• You’ve got children and would want to take time off work if they became seriously sick or injured

How much does Trauma Insurance cost?

Your premium is calculated based on your age, gender, whether you smoke and of course the amount of cover and features you want. Your medical history can also impact your premium.

Stepped premiums are cheaper in the short term but increase each year with age and can become expensive when you’re most likely to need protection in your 40s. Level premiums are more expensive in the short term but are generally lower in cost over the long term as they do not increase with age so your policy is more likely to remain affordable as you get older.

The following table gives a guide for illustration purposes (calculated on 20/10/2016 – assumes client has not previously suffered a medical condition or disease).

Non-smoker office worker	$100,000 Premier Trauma cover with reinstatement – stepped premium
	Female	Male
Age 18	$20-30/m	$20-30/m
Age 30	$25-35/m	$25-30/m
Age 45	$65-85/m	$60-80/m
Age 55	$130-190/m	$180-270/m

To find out the best way for you to get trauma cover, speak to a financial adviser as there are different options available from different insurers and some will protect you better than others. They will be able to provide you with a firm premium quote specific to your needs, which may also include other types of insurance such as term life, TPD and income protection.

The information contained in this document is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

---

[1] Source: https://www.pwc.com.au/publications/assets/insurance-facts-figures-may2016.pdf

[2] Source: https://www.zurich.com.au/content/dam/australia/life_insurance/marketing/Zurich-Australia-facts-about-zurich-claims.pdf