Trauma insurance is a type of personal insurance that pays a lump sum benefit if you experience a major illness or injury. Unlike TPD insurance where you only receive a pay out when you are totally and permanently disabled, trauma insurance will pay a benefit regardless of whether the major illness or injury permanently impacts your life.
It is designed to help ease your financial burden so you can take time out to recover. People usually insure for $50,000 to $100,000 to help cover medical costs and to allow a year of recovery time.
The illnesses and injuries covered may vary slightly between different insurers, but some common ones include cancer, heart conditions and strokes.
To understand what is covered under a Trauma Insurance policy make sure you carefully read the insurer’s product disclosure statement (PDS).
When deciding how much TPD or Trauma insurance cover is right for you, take these factors into consideration:
· How long could you last on your savings/ emergency fund?
· Do you have private health insurance to cover some medical expenses?
· Do you have Income Protection insurance to replace lost income?
Trauma Insurance can be purchased from a financial planner.
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