Have you ever wondered whether you might benefit from trauma insurance?
It’s a type of cover that isn’t as widely held as some other forms of insurance – the Financial Services Council says about 18 percent of New Zealanders have it.
But it can make a significant difference if you encounter a major health event.
Here are some of the most common questions about trauma insurance, answered.
What is trauma insurance, anyway?
Sometimes also referred to as critical illness cover, trauma insurance is designed to provide a lump sum in the even the insured person suffers any ofa range of serious health events. That can include types of cancer, loss of limbs, loss of sight and serious heart attacks. Policies can vary but usually about 40 different types of conditions are covered.
Trauma policies tend to cover only the most serious health events that life can throw at you, so it’s important to read your policy document so you know what to expect, as IFSO outlines here. As your adviser, we can help.
How do claims and payouts work?
When you experience one of the health conditions that your policy covers, you can make a claim. This is then paid out as a lump sum that can be used for anything you need to pay for – bills, non-funded medicines, treatments or paying down debt.
There is no limit on what the money can be used for.
The amount you are paid will depend on the level of cover that you took out, so it’s important to ensure it is appropriate from the outset.
Is it the same as health insurance?
Trauma insurance is quite different from health insurance. While health insurance might help with the cost of receiving treatment, and often payouts go directly to the healthcare provider, a trauma policy payout is yours to do what you wish with and is paid to you.
Will premiums increase over time?
If you do not have a level premium policy, it is likely that your trauma policy premiums may increase as you get older. We can help you to determine ways that you can keep your insurance budget-friendly.
What about the kids?
Some insurers offer trauma cover for children as an add-on. We can show you what’s available.
What conditions are covered?
Some of the most common conditions covered include severe heart attacks, terminal illness, some cancers and strokes. You might also get cover for loss of sight, liver conditions, head trauma or severe burns.
Do you need to be off work to make a claim?
While trauma policies can be very helpful if a health condition means you cannot work, you do not have to have stopped work to make a claim.
Like to chat?
We’re here to help with any queries you might have about trauma insurance, or any other personal cover that might be appropriate. We can help you work through the options available and ensure that you and your family have the peace-of-mind that comes with making well-informed insurance decisions.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.
