Creating Financial Security When Trauma Happens

trauma insurance ins and outs - financial knowledge for women

So you know that Life Insurance pays out when someone dies; Total & Permanent Disability pays out on… just that – so where does Trauma insurance fit?  Is it like Health Insurance?  Never heard of it?  Maybe you’ve heard it called Recovery; Health Events cover or Critical Illness Protection.

What is the purpose of trauma insurance?

Basically, to provide a lump sum if you suffer a specified medical condition, such as cancer or stroke.

Who needs it?

Everyone!

  • You will need it if… additional expenses are incurred when you have a major illness.
  • You need time to recuperate without financial stress.
  • You may need to significantly restructure your lifestyle.

When people are looking to cut expenses, insurance can often be top of the hit list!  However, the most important thing to remember is that even some insurance cover is better than none!

A change of priorities – insure yourself or your car?  Or how can you manage to accomplish both?

What comes first? The chicken or the egg? The same question applies when it comes to insurance.

Many Australians insure their car, but don’t think about insuring the ‘engine’ that enabled them to buy their car in the first place – themselves.

We all need to protect ourselves first as our income and health are our biggest assets and in turn, the means to fund other assets.

Insuring yourself can cost less than insuring your car too. It’s a sad fact to consider that many Australians will receive more insurance money for their damaged car than for themselves after a major motor vehicle accident or serious illness. 

Protecting Yourself and Your Family

Have a think for a minute about how your family would react if you were diagnosed with a Cancer event – such as a carcinoma in situ of the breast, or Leukaemia.  Maybe coronary events run in your family and by-pass surgery or coronary artery disease is of concern to you. 

Would blindness, dementia, major burns, head trauma or severe rheumatoid arthritis mess with your big plans for the future?  All these events are insured for a lump sum payout under Trauma Insurance.

If you’re like most Australians – especially women, you’re likely to be underinsured.  This means you don’t have the protection mechanisms in place to protect your family in event of the unexpected.

One in five families will lose either a parent or see them suffer an illness or accident so serious that it prevents them from working.  If that parent also happens to be a breadwinner, it could halve the money coming in.  Just consider how that would impact on lifestyle, housing, entertainment and educational choices for the family! 

By contrast, those will sufficient levels of insurance, can pay off their mortgage and maintain their lifestyle with an income of around 75% of pre-crisis levels. 

Some insure for as little as one year’s wages (maybe $50k) and other’s for their entire level of debt ($500k.)  How would you like a cheque banked into your account to help cover your debts and living expenses while you take care of your health? 

Would that help take the stress of a little?  Maybe you could get a carer in for the kids – or a cleaner every week.  It’s just nice to have options. 

A girlfriend of mine was diagnosed with level three breast cancer at 35 and was insured for $70, 000 Trauma.  She chose natural therapies to fight her battle and was pleased to have the funds at her disposal to do so… although wishing there had been more!

Insurance Questions

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Often, you’d think that getting the insurance right means answering some complex questions:

  1. Which insurances?
  2. How much of each?
  3.  What happens if I need to claim more than once?

  4. How can I fund it all?

Many put off making the big decisions – but there’s really no need. 

Professional Advice

Qualified Advisers are always available to help work out how much you need, which company would suit your family and budget and how best to fund it. 

This is all usually done for NO cost by qualified risk specialists or financial advisers who are usually paid via a commission option on completion of the insurance. 

If you aren’t comfortable with this, some will even be happy to discuss a ‘fee for service’ style arrangement.  Even if you do go ahead… and then get cold feet – you’re likely covered by a 14 day cooling off period. 

Some companies now offer the benefit of rolling all the covers in together and they provide significant savings to do so.

Trauma insurance may be something you’ve never thought about, or one of those things you always wanted to get around to investigating… so no more excuses.  Pick up the phone and find out how it can work for you!

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Find out about Amanda Cassar

Find out about Amanda Cassar

Guest Writer Amanda Cassar of Wealth Planners Partners

Amanda Cassar of Wealth Planning Partners has a passion for creating financial freedom and believes it's possible for all of us.

Amanda has been involved in the finance and insurance industry since 1991. Her particular passion is making sure all families have adequake risk strategies in place to protext what they're already worked so hard for, and then look to wealth creation for the future.

Amanda has recently completed her Masters in Financial Planning (MFP) and is a Telstra Business Women's Award Network member. She is a mum of two teens, enjoys good food, great wine and travel - and loves living on the beautiful Gold Coast. 

You can find more financial knowledge and wisdom through the Wealth Planning Blog and Wealth Planning Partners Facebook online resources.

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