Is trauma insurance important?

Illnesses like stroke or heart attack can stop you from working for prolonged periods of time. This means a halt in getting a regular source of income which can mean a lot if you’re suffering from a medical condition.

A trauma insurance can greatly help in these instances. The insurance money you’ll receive can help you focus more on getting better instead of worrying too much about your financial needs.

Importance of Trauma Insurance


Trauma insurance is a form of insurance that covers people suffering from critical illnesses. A lump-sum payment is made by the insurance company to help cover the financial and medical needs of a client.

Health insurances only cover medical expenses and use of hospital rooms. Oftentimes, these policies are limited to mild and medium levels of illness severity. Trauma insurances, on the other hand, are meant to cover serious and debilitating injuries. They’re designed to sustain your living conditions even though you don’t have a regular source of income.

According to the 2017 data from Finder, the chances an Australian acquiring a chronic disease in their mid-30s is around 50%. The medical cost for treatment ranges from $100,000 to $300,000 depending on the severity of the illness.

You don’t want to get caught off guard and plunge your family into debt paying for medical expenses. Having a trauma insurance will relieve your worries of not having enough money to cover your financial obligations.

So, where can you use the money you’ll receive? Here’s a list of where insured members usually funnel the money:

-          Mortgage payment

-          Debt settlement

-          Pay for your family’s needs, e.g. school tuition, groceries, and others

-          Medical care, supplies, or equipment

-          Travel and leisure


You can rest and focus on your rehabilitation when you have enough money to cover these items.


Insurance Coverage


Trauma insurances cover only a certain set of health conditions. Make sure you read the fine print of the policy offered to you to have a clear idea which medical conditions are covered. Usually, this includes the following conditions:

-          Cancer

-          Heart conditions requiring operation like by-pass surgery and aortic surgery

-          Chronic liver or lung disease

-          Coma

-          Chronic kidney failure

-          Encephalitis

-          Dementia

-          Blindness

-          Deafness

-          Brain or spine tumour

-          Aplastic anaemia

-          Alzheimer’s disease

-          Head trauma

-          Speech loss

-          Muscular dystrophy

-          Systemic sclerosis

-          Organ transplant

-          Most terminal illnesses

Some insurers cover more conditions aside from those listed above. Expect premiums for these to be a bit more expensive because of their wider scope.

If you already suffered from a serious illness or you have a pre-existing condition, you’ll have a difficult time getting insured. However, you can still get covered for conditions unrelated to your previous or pre-existing illness.

The insurance money is given the moment you’re diagnosed with a condition covered by your policy. Policy providers require transparency with their clients regarding their health conditions. They will require you to provide them with your medical history to make sure you’re eligible for trauma insurance coverage. Hiding vital information from them may forfeit your claim and put you at a disadvantage.

How Much It Will Cost You

Having to shell out part of your monthly income to pay for insurance premiums is not something that can be taken lightly. The compounded amount may become too burdensome to some individuals.

Before you apply for a trauma insurance, make sure you’ve considered the following factors to determine whether you need one or not.

-          What does your current health insurance cover?

-          Do you have a life insurance funded through your superannuation fund?

-          What is the amount of income your family needs in case you’re hit with an illness that will disable you from working for a long time

-          Any compensation or benefit the government can provide for your condition?

These are the questions you have to ask yourself to help you come up with a decision. If your answer is gearing towards getting a trauma insurance, the next step is to consider the cost.

People in their twenties and thirties will have to pay around $20 to $50 premium per month to get an average of $200,000 lump sum payment. Older people are likely to pay twice the average price for those in their thirties because the chances of them getting hit with a serious illness gets higher as the body ages.

Only you can gauge how much you’ll need to cover your needs. As a guide for determining the amount you’ll need for trauma insurance coverage, consider your answers to the following questions:

-          Amount of lump sum insurance you’re applying for

-          Your current occupation and all the risks accompanying it

-          Your age and sex (some diseases are more prevalent in one sex over the other)

-          Hobbies and its associated risks

-          Smoking habits

-          Additional fees charged by the insurer

Insurance providers will look at your lifestyle to gauge if you can be accepted for a policy or not. Those tagged as ‘risk takers’ may have a hard time qualifying for insurance as they have higher chances of claiming the payment in a short time.

Choose if you want a stepped or a level mode of premium payment. Stepped premiums have lower rates at the beginning which then gradually increases as you grow older. If you prefer to pay a fixed amount over a longer time period, the level scheme may be the appropriate choice.

Children can also be applied for a trauma insurance. It must be included, though, in an adult’s insurance policy.

Insurance Providers

Super funds stopped offering trauma insurances since mid-2014. Private insurance providers picked up the slack, providing people with flexible and budget-friendly terms.

Here are some household names in the insurance business:

-          NobleOak

-          Ozicare

-          ANZ Life Insurance

-          HSCB Easy Life Insurance

-          Allianz Life Plan


There are more trauma insurance providers in the country aside from those listed above. Each one has their own rates and coverage conditions. Choose one that suits your budget and lifestyle.

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