This is a type of insurance that should pay out a lump sum if you are diagnosed with a life-threatening illness such as cancer or heart disease. The money is tax free and can be used in any way you like – to pay a lump sum off your mortgage, enable you to stop working, or buy private medical care. You decide how much you think you’ll need when you take it out.
Cancer accounts for almost two-thirds of claims, followed by heart attack, stroke and multiple sclerosis. But it’s important to remember that Trauma insurance only covers the conditions laid out in the policy and no others, and your illness must meet the tight definitions described.
Do you need it?
It worth noting that your super fund may have some insurance within it, however it won’t contain any Trauma insurance, as you cannot hold Trauma cover under superannuation.
The experts say you are six times more likely to claim under Trauma than life insurance. Couple this with the fact that there is a one in three chance of suffering a Trauma condition before the age of 75, and the easy answer is yes!
How much does it cost?
Trauma is usually added to life insurance, and the cost will depend on your age and medical history. The cheapest policies have the fewest conditions covered and the tightest definitions of when it will pay a claim.
As a rough guide a 40 year old non-smoker, male, looking for $100k of cover would pay approx. $20 per month.
