Major Illness Insurance (Trauma)

What is Trauma Insurance Cover?

Trauma insurance cover or critical illness insurance provides a lump sum of money to cover immediate medical expenses and other financial needs when a critical illness or injury occurs. Trauma cover pays a agreed amount to cover you for many different issues such as heart attacks or intensive care.

A serious illness or injury causes more than just physical and emotional turmoil – it has the potential to cause severe disruption to your finances as well. While income protection helps to replace a portion of your income when you cannot work due to illness or injury, it’s useful to have a lump sum of money to cover your immediate medical and financial needs. This is where trauma insurance comes into its own. So you can get on with recovering and getting on with life, without worrying too much about your finances.

The table below shows some of our best life insurance options available for a non-smoking female aged 30-39 years old, who is working in a white collar occupation group such as a clerk or office administrator. This table is sorted by Star Rating (highest to lowest).

Compare the rest of your options when it comes to term life insurance using our website:

Compare Term Life Insurance

What types of conditions are covered under Trauma?

The conditions that you can insure yourself for will vary from policy to policy, but will typically include as standard various cancers, heart disease and/or heart attack, and stroke.

Beyond these common diseases, there are several dozen other conditions that may also be included. Some examples include major burns, organ transplant, and motor neurone disease. The product disclosure statement (PDS) for a policy will detail what conditions are covered.

Our article on what trauma insurance covers provides a more detailed list of just a few of the things that may be covered by a policy:

  • Alzheimer’s disease
  • Aortic surgery
  • Aplastic anaemia
  • Benign brain tumour
  • Benign tumour of the spine
  • Blindness
  • Cancer
  • Chronic kidney failure
  • Chronic liver disease
  • Chronic lung disease
  • Cognitive loss
  • Coma
  • Deafness
  • Dementia
  • Encephalitis
  • Heart conditions: Cardiomyopathy (heart disease), Coronary artery by-pass surgery, Heart attack, Heart valve surgery, Open heart surgery, Out of hospital cardiac arrest, Triple vessel angioplasty
  • HIV (medically acquired or occupationally acquired)
  • Intensive care
  • Loss of independent existence
  • Loss or paralysis of limb
  • Loss of speech
  • Major head trauma
  • Major organ transplant
  • Meningitis and/or meningococcal disease
  • Motor neurone disease Multiple Sclerosis
  • Muscular dystrophy
  • Parkinson’s disease
  • Pneumonectomy
  • Primary pulmonary hypertension
  • Severe burns
  • Severe diabetes
  • Severe osteoporosis (before age 50)
  • Severe rheumatoid arthritis
  • Stroke
  • Systemic sclerosis
  • Terminal illness

Trauma insurance and the types of conditions which may be coveredHow much trauma cover should you have?

The amount of trauma cover you should have will depend upon both your family and financial situation. As previously mentioned, your income protection policy will be your main source of ongoing cashflow, so your trauma insurance is designed primarily to provide for your short-term needs.

As a basic guide, a trauma insurance policy may be used to:

  • Provide a lump sum for immediate medical needs involved in treatment and recovery.
  • Pay off any personal debts such as a mortgage.
  • Provide a cash buffer.

For a purely hypothetical example, here’s how that might work in practice:

Case Study:

Case study trauma life insurance

Jane, aged 32, is married with two small children. She and her partner have a mortgage with an outstanding balance of $150,000, and a car loan of $30,000.

Jane works full-time, earning $65,000 per year as an account manager. Jane has income protection insurance that could cover the mortgage and daily expenses if she were off work. But she also wants peace of mind that if she were to suffer a major medical illness or injury, she and her partner could continue to afford their lifestyle while she was off work.

As such, she has calculated her trauma insurance needs as follows:

$30,000 – immediate lump sum for medical costs

$150,000 – mortgage repayment / cash buffer

$30,000 – car loan repayment

Total: $210,000

Jane calculates that with trauma cover of $210,000, her 75% income protection policy would then be sufficient to replace her existing cashflow while she was off work.

Please note this is just an example – the needs of each person will be different. As an information provider, CANSTAR only provides general advice and does not take into account your objectives, financial situation, or needs. You should talk with a financial adviser about your specific and individual needs.

How much does trauma cover cost?

The following premiums are current as at our 2016 Advised Life Insurance star ratings. Monthly premiums have been rounded to the nearest dollar.

Trauma (Male – Stepped)

Monthly Premiums ($/month)

Occupation Sum Insured Min Max Average
Twenties Professional $200,000 $28 $47 $36
White Collar $150,000 $24 $38 $29
Light Manual $150,000 $24 $38 $29
Blue Collar $150,000 $24 $38 $29
Thirties Professional $250,000 $44 $69 $53
White Collar $250,000 $44 $69 $53
Light Manual $200,000 $37 $59 $46
Blue Collar $200,000 $37 $59 $46
Forties Professional $250,000 $106 $162 $132
White Collar $250,000 $106 $162 $132
Light Manual $200,000 $87 $138 $112
Blue Collar $200,000 $87 $138 $112
Fifties Professional $150,000 $197 $336 $263
White Collar $150,000 $197 $336 $263
Light Manual $100,000 $133 $247 $181
Blue Collar $100,000 $133 $247 $181
Trauma (Female – Stepped)

Monthly Premiums ($/month)

Occupation Sum Insured Min Max Average
Twenties Professional $200,000 $28 $67 $40
White Collar $150,000 $23 $52 $32
Light Manual $150,000 $23 $52 $32
Blue Collar $150,000 $23 $52 $32
Thirties Professional $250,000 $45 $93 $61
White Collar $250,000 $45 $93 $61
Light Manual $200,000 $38 $80 $52
Blue Collar $200,000 $38 $80 $52
Forties Professional $250,000 $88 $153 $121
White Collar $250,000 $88 $153 $121
Light Manual $200,000 $72 $135 $103
Blue Collar $200,000 $72 $135 $103
Fifties Professional $150,000 $122 $254 $185
White Collar $150,000 $122 $254 $185
Light Manual $100,000 $83 $198 $128
Blue Collar $100,000 $83 $198 $128
Source: www.canstar.com.au  Average premiums current as at 17 August 2016. Average premiums have been rounded to the nearest dollar.

To find out more about getting trauma insurance cover from a financial adviser and to compare your options, read our annual Life Insurance Star Ratings report.

 

Other Types of Insurance

Advised Income Protection

Income Protection

Life Insurance

Life Insurance (term insurance)

TPD Insurance

TPD Insurance (Disability)