Lets start with the basics once again. I’ve gone through the basic search patterns online and found that while everyone talks about the product Trauma Insurance but no one really is going into the details of what it is. So I am endeavouring to educate you for the basics. Perhaps when your research comes to a conclusion you may give me a call to discuss this in detail!
What is trauma Insurance?
Trauma insurance started in late 80’s as increased risk of heart attack, cancer, stroke etc was observed. Back then this insurance product started with few conditions covered. Gradually this product evolved and more conditions were added into it.
This is a a lump sum pay out product. Life life insurance, trauma insurance payout if the insured qualifies a covered condition. So what does that mean?
Lets say you have Trauma insurance which covers heart attack. When Mr. Smith suffers heart attack and if he survives 14 days after having the heart attack and the insurance company agrees and accepts the claim then Mr. Smith gets paid what he is covered for.
Trauma insurance has seen evolution and is still undergoing several changes as the global medical issues change. AIDS, HIV, Alzheimers, dementia were added later.
Trauma insurance in New Zealand saw changes in definition of heart attack in 2016. Some companies still have the same old definition of heart attack. We will cover the heart attack issue in another post later but the essence is that Trauma is changing all the time. So what are the myths and legend about trauma?
Trauma insurance is enough!
Not at all! While trauma insurance is essentially good for any major to medium term risk. But here’s the thing either you qualify or you don’t, it will all depend on the definition of the trauma insurance policy you have. Some bank products have 8 or 12 conditions covered making them affordable. But is it enough? Answer is NO!
Trauma Insurance covers all!
While I believe its better than not having any basic cover in place but Trauma insurance is not a catch all cover. We can be rest assured that among the major life changing circumstances we have some protection, but covers all, definitely no!
Trauma insurance with more conditions is better?
This is what was seen from 2000 to until recently that more conditions covered means better cover. While its a great marketing tool, but here is the question if you have a condition covered which is statistically very remote and this condition is placed at an added premium, does it really mean you have a better product if definition for heart attack or cancer is relatively harsh?
Trauma Insurance and Terminal Illness
Terminal illness is defined as; “Illness due to which the insurance companies doctors/medical practitioners can confirm that the person in question will not survive more than 12 months.
Trauma and terminal illness are not the same. Terminal illness surprisingly is not included in trauma insurance. Trauma insurance usually pays out on conditions that can eventually lead to terminal illness but they are not the same.
Terminal illness usually included in Life insurance and most of the times Trauma would be paid out before life insurance in the event of a major illness.
Trauma Insurance and Cancer!
I’ve seen claim being paid out on cancer! When someone gets diagnosed with cancer its very difficult to just get your head around the concept that you will have a major change in lifestyle from here on. This gets worse when you go through treatment.
How long before you can go back to normal versus will you survive? Trauma insurance comes to rescue from the perspective that financially you are secure till you come through the difficult patch.
Trauma Insurance and Heart Attack!
Keeping the recent disputes of heart attack payouts aside that will be discussed in another post, Yes trauma insurance pays on heart attack.
Heart attack? Death of a heart muscle? Life is never normal after that. Don’t get me wrong, You are able to do everything that you were able to before one gradually, 3 months or six months later. It’s a long road to recovery, but in this period trauma insurance puts the money in pocket to work through the difficult patch.