Although trauma insurance is a relatively new concept to many Australians, the problems that it can address are as old as time.

As medical science has improved so too have our chances of surviving serious medical conditions and events such as heart attack, stroke and cancer.

What hasn’t improved is our ability to recover financially from such events.  Medical science can help to save your life, but they cannot save you financially.

The costs of fighting and recovering from a critical illness, especially if you cannot work for a period of time, can be financially devastating for many Australian families.

This is where trauma insurance steps in to help.

What is trauma insurance?

Trauma insurance pays you a lump sum amount if you suffer a critical illness or medical event.

Cancer, heart attack and stroke are the three most common causes for a trauma insurance claim, however there are dozens of other common and not-so-common conditions which are covered by many policies.

The amount of cover you require is set up front, and you will receive this amount upon diagnosis of a critical illness.  You can vary the amount you are covered for at any time, subject to medical underwriting.

The funds paid from your trauma insurance claim can be used to cover out-of-pocket medical expenses, access to costly advanced medical treatment, lost income if you don’t have income protection insurance, travel expenses and any other purpose you see fit.

A trauma insurance claim is not dependant on your ability to work.  Regardless of whether you can or can’t work during your illness, your trauma insurance claim will still be paid out in full.

Case study

This case study shows how trauma insurance can help a person suffering from a critical illness.

Tom is aged 39 and is married with three young children.  The family is fairly comfortable financially, however as with many Australian families they do have a large mortgage to maintain.

After a number of examinations and tests over a period of time, Tom was diagnosed with liver cancer.  His doctor believed that they could fight it, but Tom would immediately have to cease work and travel to Melbourne for specialist treatment.

Tom had recently changed jobs and did not have a great deal of sick leave available.  His paid leave would run out after two weeks, and the family only had enough savings to last for three months.

Thankfully Tom’s financial adviser had convinced him a few years prior to take out a trauma insurance policy of $400,000.

After the diagnosis was confirmed, Tom insurance company paid the full $400,000 to Tom’s bank account, completely tax free.

Tom used to money to put their mortgage in front by twelve months and payout some credit cards debts.  He could also afford to temporarily relocate his family from rural Victoria to Melbourne so that they could all be together during his treatment.

Tom’s insurance payout meant that he could afford the best medical treatment available without having to worry about money or the mortgage, and he was able to have his family by his side the whole time despite the family home being many hours from the hospital.

It was a long and difficult fight, but eventually Tom did beat his illness.  By the time all of the medical bills were paid and he was ready to return to work most of the trauma insurance funds had been used up, but at least they still had their saving intact and the mortgage was up to date.

Without trauma insurance the family would have run out of money long before Tom beat the cancer, and they most likely would have needed to sell the family home in order to cover their expenses.

It could be argued that Tom’s trauma insurance improved his chances of recovery by ensuring that he didn’t have to worry about money and could instead concentrate on his recovery with his family by his side.

Trauma insurance quotes

It is clear from the case study above that trauma insurance can be truly life changing when you are most in need.

If you think that trauma insurance could help you and your family, the first question you’ll probably have is regarding the cost of the cover.

Once you have calculated how much cover you need, the next step is to obtain a few trauma insurance quotes.

Quotes for trauma cover are available from a number of different sources.  Many people obtain quotes via their financial adviser, whilst others use online comparison websites to obtain and compare quotes.

However you choose to get your quotes and take out cover, the most important thing is to find the trauma insurance policy that will best suit your personal situation and provide you with good value for money.