If you have trauma insurance and you suffer from a major illness you will be paid a lump sum upon diagnosis of the illness. This means it can be used to provide an income, pay off debts, or it can be used to pay for care and medical bills. The best trauma insurance plans cover you for multiple illnesses.
It would be too bad if you just took out the cheapest cover – which is cheap because it only covers a few major illnesses – and then you found that you were suffering from an illness that was not covered. That would mean that you would not get paid anything and all the money you had been paying over the years was wasted. Worse still, you would have none of the financial help that you had expected to get when you really needed it.
You do not have to have a terminal illness to be paid trauma insurance. It is possible that you will recover completely. But the illness needs to be one of the defined benefits.
You may think that income protection insurance is better, since it will pay you no matter what type of illness or accident you suffer from. However, that kind of insurance is not available to those who are not working. So if you unemployed at the moment, trauma insurance is the one to get for protection.
The best trauma insurance plans may also include a death benefit and TPD – total and permanent disability. When buying trauma insurance as part of a package the premiums may be reduced.