Unlike life insurance that only pays out to your beneficiaries when you die, trauma insurance pays a benefit when you are diagnosed with an illness. In fact it is sometimes called critical illness insurance. The benefit of this is that you and your family have extra money to help pay for medical expenses, care and nursing or other debts such as your mortgage repayments and general living expenses. This will take a great load off your mind and enable you to focus on your recovery rather than worry about how you are going to pay the bills.
The condition that you suffer from needs to be a severe one, but not necessarily one that is terminal – though it may well be. Usually the conditions are named in the policy and if you are unfortunate enough to contract a disease that is not named, you will not be paid. However, by choosing a trauma insurance policy that has a comprehensive list of conditions this eventuality can be almost eliminated. It is only when you choose the cheaper policy that lists fewer conditions that it could happen.
However, statistics taken from an insurance company reveal that the greatest majority of claims were for one of four major illnesses: cancer (62%), heart attacks (13%), coronary artery disease and bypass surgery (11%) and strokes (9%). That left a mere 5% that were spread over a great many diseases and conditions. So taking out the cheaper policy is not necessarily such a risk as you may have supposed.
You may wonder whether income protection may not be even better than trauma insurance since it will cover you in the event of any kind of disability or sickness that prevents you from working. We recommend that you have both types of Insurance as trauma is a defined events contract whilst Income Protection Insurance is a open contract so should you be unable to work benefits will be payable.
The catch here is you must be working of course. Although if you take sabbatical leave or extended leave a good quality Income protection Insurance policy will still provide benefits.
It goes without saying you get what you pay for.
Case Study – Trauma Insurance and Income Protection Insurance
In a recent case study we witnessed one client that suffered a heart attack and returned to work in 2 weeks – light duties of course. But as he was at work, Income Protection Insurance did not provide any benefits. One solution you can buy comprehensive trauma insurance as part of good quality Income protection policy. These are usually identified as a “Plus” or “Comprehensive” in the title of the policy. Best still this can be complicated trying to buy online so talk to one of our adviser who will be more than happy to help.