It is almost certain that if you live long enough you will know of at least one person if not more who has had a serious medical illness such as cancer, stroke, or a heart attack. Unfortunately, this often leaves people in serious financial trouble as they struggle to pay out of pocket medical expenses, take time off work and meet their financial obligations.
The History of Critical Illness Insurance
It wasn’t until 1983 that the first policy of this kind was brought into existence. With the advent of better medicine and increased understanding of how to treat certain illnesses it became clear that many families were struggling to cope financially when suffering from severe illness. With this in mind, trauma insurance in Australia is designed to help you when you suffer medical conditions like cancer, heart attack, stroke, and heart disease.
Data from GenRe Life Health shows that cancer is currently the leading cause of trauma cover claims in Australia, accounting for 30% of all reported fatalities. In comparison, stroke and heart failure account for 34% of all deaths. At this point, it is worth noting that terminal illness can affect a patient’s loved ones, too. For instance, the spouse of a terminally ill person may stop working to act as a primary care giver leading to financial difficulties. In the state of New South Wales, 57% of cancer survivors are unable to work for at least five months after diagnosis.
Fortunately, Critical illness (or Trauma) cover is a product that allows the life insured to receive a lump sum payment in the event they develop any of the medical conditions listed in the policy. It provides a safety net, and allows you to recover from a serious illness without the burden of financial worries.
The five main conditions that are covered in the majority of policies are:
- Heart attack
- Open heart surgery
- Loss of independence
However, many insurers are now offering more advanced policies that allow you to be covered in the event of illnesses such as blindness, deafness, major burns. Some policies are even able to provide cover to a lesser degree for things such as melanomas, carcinoma in situ and adult insulin dependent diabetes. The important thing in all cases is to understand your policy definitions, as each illness has a defined set of conditions that must be satisfied in order for you to claim successfully.
If your policy is underwritten or assessed prior to you taking out your policy, you have the peace of mind that any medical condition, illness or hereditary condition will have been fully considered prior to implementation. This is vital, as policies that are not medically underwritten often have clauses that prevent a benefit being paid due to pre-existing conditions. If you have a policy in force that has not been underwritten you may be at risk.
The Benefits of Buying Trauma Cover at a Young Age
Although you can purchase trauma coverage even up to age 60, it is wise to do so at a young age. The reason for this is that even though you may not feel you are likely to suffer a critical illness until the later stages of life, you could develop medical conditions that increase the likelihood of a critical illness. High blood pressure, cholesterol issues and thyroid problems are all relatively common, as is the all too common expansion of our waistlines! Having cover before you need it can allow your premiums to be much lower as your policy will be priced at your initial healthy rating.
Level versus Stepped Premiums
Following on from our belief in implementing trauma cover at an early age, we help you consider the long term costs of keeping this important cover. As many of the illnesses are ones which are more common as you get older, having your cover in place at that time is of utmost importance. By initially paying a little more, you can ensure that you aren’t debating the cost vs benefit at your most vulnerable point.
Trauma insurance can have a massive impact on a persons and families ability to recover from illness. We believe that having no financial worries at such a stressful time can help reduce stress, which could lead to you recovering from your illness much sooner than without.