What is Trauma Insurance?

A common question I get asked by clients, "What is Trauma Insurance?". To keep it simple my initial soundbite reply is that Trauma Insurance pays a lump sum in the event of a specific diagnosis. It is of course a bit more complex than that.

The Many Names Of Trauma Insurance

Different companies have different names and different products for Trauma Insurance, you might find some of the following names:

• Trauma Cover
• Trauma Multi
• Progressive Care
• Critical Illness Cover
• Severe Trauma Cover
• Moderate Trauma Cover
• Traume Recovery Benefit

You get the idea, they all sound the same but while there are significant differences in the wording that can lead to enormous variations at claim time. Yes, essentially they do a similar thing but so does a Trabant and a Ferrari.

So What Do These Differences Mean?

One of the immediate differences that people notice are the number of conditions covered. This can be quite a significant difference. Some policies, generally older ones, will consider a claim for maybe 15 conditions, while some of the newer policies will cover 50 or more.

The newer policies can also be more generous, adding diagnosis or partial payment benefits. This can mean a smaller claim, a proportion of the total, even if the diagnosis at the point is relatively benign. This will not preclude a bigger claim should the disease progress (and the policy allow) in the future.

How Easy Is It To Make A Claim.

The trauma insurance policies will consider a claim if specific conditions, set out in the wording, are met. It’s like a high jump you either make the condition for a claim or you don’t. This doesn't mean if the condition gets worse you can't claim once the criteria are met.

The criteria for a claim can change dramatically from one policy to another. For example it is possible to meet a full claim criteria with a 1mm deep melanoma, however other policies require an optional benefit to be added to make this criteria and others will never cover a melanoma this small.

That is why it is so important to know the wording of the policy. When the cardiologist recommends a bypass you might think yout trauma cover will help but a claim may require a rare open heart surgery. It's then too late to upgrade or change a policy.

If you are worried about what your policy covers contact a fully inderpendent adviser to discuss your trauma insurance.

Does Trauma Insurance Cover Children?

It makes sense to have trauma insurance for your children. It can be very expensive if a child becomes seriously ill. Parents will need to take time off work, there may be expensive trips to hospital, hotels and even specialist medical equipment. If the condition is chronic or permanent there could be lifelong expenses. This can even be the case if there is health insurance.

Fortunately many modern policies have included cover for dependent children under the adults policy. The amount of a claim for a child will vary from a percentage to a set amount. It is also possible in some cases to transfer this to the child when they become an adult without further underwriting.

If you wish more it is also possible to increase the amount of cover for children.

Is My Trauma Insurance Any Good

The answer lies in the wording. You will be able to access this on your insurers website and it will cost you nothing but time. This will be able to tell you what is covered and the criteria needed to make a claim. It is of course easier to have an adviser to look over it with you.

If you have aparticularly old policy, or one that was purchased from a bank, it could be that you have a policy that compares very poorly to the market leaders. If that is the case then you could consider upgrading or changing your policy. This may not be possible if you now have pre-existing conditions however it is also possible even with pre-existing conditions a new policy would cover more conditions.

What Should I Do If I Want To Change My trauma Cover?

If you are unsure then give us a call. We can have a quick chat and find out if you need or want our help.

You can email - marc@coveryours.co.nz or give me a call 0800 268379.

Cover Yours Ltd (FSP769531) and Marc Hamilton (FSP306046) are registered Financial Service Providers and you can search the register here. Marc Hamilton is a member of the FSCL Disputes Resolution Service. Cover Yours Ltd and Marc Hamilton’s disclosures can be found here or by emailing marc@coveryours.co.nz