Trauma Insurance Guides

When you are considering the different types of personal insurance for the first time, those that will be protecting your financial life, you may not be 100% sure what is available by way of products or options.

As a result of this, we have tried to put together a number of informative articles to help you learn about trauma insurance, also known as trauma cover and how it can protect your financial future. In these articles we cover a number of options and informative points to get you thinking about trauma insurance, options to have or not to have, what factors affects your premiums and how these in turn can affect your levels of cover and benefits.

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These trauma insurance articles discuss things like critical illness insurance and trauma insurance definitions, however, they trauma insurance do not cover everything, although this may not possible as you may need assistance in understanding how trauma cover works.

Another reason is that some people have unique occupations or medical conditions that must be taken into consideration before an appropriate trauma insurance policy is found.

Benefits of trauma insurance

A trauma insurance policy pays a lump sum if you suffer from a medically diagnosed traumatic event as defined in an insurer’s product disclosure statement (PDS). The funds from a trauma insurance benefit payment can be spent as you see fit, such as paying for costly medical bills.

The below is not a definitive list, however, it may give you an idea into what kind of medical conditions and diseases insurers will cover in regards to trauma insurance. Since each insurer defines each condition differently, it is important to read the definitions in your PDS before making a final decision.

Typical trauma events covered in standard policies

Trauma insurance policies generally cover the following:

  • Alzheimers
  • Aplastic anaemia
  • Benign brain tumour
  • Burns – severe/major
  • Cardiomyopathy
  • Certain Cancer’s
  • Coma
  • Coronary artery angioplasty
  • Coronary bypass surgery
  • Deafness
  • Dementia
  • Encephalitis
  • Heart attack
  • Heart surgery
  • Hemiplegia
  • Chronic kidney failure
  • Aortic surgery
  • Limb paralysis
  • Liver disease – chronic
  • Loss of independent existence
  • Loss of limbs
  • Loss of sight
  • Loss of speech
  • Lung disease – chronic
  • Major head trauma
  • Major organ transplant
  • Meningitis
  • Motor neurone disease
  • Multiple sclerosis
  • Occupationally or medically acquired HIV
  • Out of hospital cardiac arrest
  • Paraplegia/Quadriplegia/Diplegia
  • Parkinson’s
  • Peripheral neuropathy
  • Pulmonary hypertension
  • Severe burns
  • Severe diabetes
  • Stroke
  • Terminal illness

Additional coverage (also known as ‘Plus Options’)

For an extra cost, you can choose to have your trauma insurance policy cover additional medical events. Be sure to read the trauma insurance definition of each medical condition carefully.

The following are examples of additional cover that you can pay for:

  • Adult insulin dependent mellitus
  • Burns of limited extent
  • Carcinoma in situ
  • Chronic lymphocytic leukemia
  • Hydrocephalus
  • Melanoma
  • Partial blindness
  • Partial deafness
  • Severe endometriosis
  • Systemic lupus erythematosus (SLE)with lupus nephritis 

Qualifying period for trauma insurance benefits

There are some medical conditions where your trauma cover must be in force for a minimum number of days before a claim can be made and a benefit paid out. The typical number is 90 days, however, be sure to check your PDS. Such medical conditions may include:

  • Angioplasty
  • Cancer
  • Open heart surgery
  • Coronary artery bypass surgery
  • Heart attack
  • Heart valve surgery
  • Severe diabetes
  • Severe osteoporosis
  • Severe rheumatoid arthritis
  • Stroke
  • Systemic sclerosis
  • Triple vessel angioplasty
  • Adult insulin dependent diabetes mellitus
  • Carcinoma in situ
  • Chronic lymphocytic leukemia
  • Hydrocephalus
  • Melanoma
  • Partial blindness
  • Partial deafness
  • Severe endometriosis
  • Systemic lupus erythematosus (SLE)with lupus nephritis 

Please note that you need to refer to a product disclosure statement (PDS) for exact details of what you may be covered for.

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The most common cause of trauma insurance claims includes cancer, stroke, and heart disease. These top three conditions account for nearly 70% of all trauma insurance claims (1). 48 is the average age of a claimant (1).

The variety of medical conditions and illnesses covered by insurers vary, so make sure you carefully analyse the definition of each condition as outlined in your product disclosure statement (PDS) before choosing a trauma cover policy.

Typical claims on trauma insurance

As cancer is the number one reason for a trauma claim, we have outlined below the four main types of cancers which account for over half the cancers suffered by both men and women. Due to medical advancement, the chances of survival these days are quite high, despite the lengthy recovery periods.

The four main types of cancer claims for women include:

  • Lung
  • Breast
  • Bowel
  • Melanoma of the skin

The four main types of cancer claims for men include:

  • Prostate
  • Bowel
  • Lung
  • Melanoma of the skin

When trauma insurance claims can be denied

When deciding on which trauma insurance policy is best for you, you should make sure that you read and understand any exclusions or other conditions outlined in the trauma insurance policy document (PDS).

Trauma claims may be declined for the following reasons:

  • Conditions or injuries that are intentionally self-inflicted
  • A pre-existing condition that has not been disclosed
  • A condition or disease which is not covered in the policy
  • A claim made before expiry of the waiting period

1 Tower Claims statistics, September 2008

Major causes of trauma insurance claims

Trauma insurance offers financial assistance to those who have suffered a specified traumatic event. In Australia, traumatic events are common, with the major causes of trauma insurance claims including:

  • heart attack;
  • heart disease;
  • stroke; and
  • cancer.

There are many trauma insurance policies available on the Australian market, each covering a variety of diseases and medical conditions. Each disease or condition will also have its own particular definition.

However, most insurer’s trauma claims experience are mainly due to cardiovascular disease, including heart attack and stroke.

Statistics about trauma insurance

  • It is estimated that new cases of cancer diagnosed before the age of 75 are projected at being around 33% for men, and 25% for women.
  • Also, nearly 8% of Australians had a cardiovascular disease of some sort, and that the risk of suffering a trauma is very high*.

With these statistics in mind, it is no wonder that trauma insurance can really financially assist those in need.

You do not have to die or be declared terminally ill to make a trauma insurance claim, and your income does not have to suffer. Just meeting the definition of a traumatic event outlined your the product disclosure statement allows you to make a trauma claim.

Source: *Australian Institute of Health and Welfare (AIHW) 2004/2005

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Published: July 28, 2013

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