Trauma (Critical Illness) Insurance
Trauma or critical illness insurance pays a lump sum in the event of diagnosis of around 50 covered critical illnesses, including the major ones such as cancer, heart attack and stroke. The covered conditions are, by nature, serious and potentially threatening and, as a result, can have a significant financial impact. A critical illness insurance policy helps alleviate the financial impact.
What Is A Critical Illness Insurance Policy?
Critical illness or trauma cover provides a lump-sum amount that is paid on diagnosis of certain major medical conditions (e.g. serious cancers, heart attacks, loss of functionality, strokes, major burns etc). The cash payment can be used for any purpose whatsoever, but is often helpful to cover loss of income, to pay for specialist treatment that may otherwise be unaffordable or enable you to take time off from work to concentrate on rehabilitation and recovery which will enable you to return to work much quicker.
Trauma insurance is designed to give you money when you need it most.
It is the most expensive product. However, it is the one that’s most claimed upon and that’s reflected in the cost!
An example of how a critical illness insurance policy can assist: if you were to suffer from cancer and were to be off work for a couple of years due to chemotherapy, stress etc, your life insurance would not pay out, nor would your total & permanent disability insurance, as you will return to work one day. However, your trauma insurance would pay out your designated lump sum payment to ease the financial pressures of not being able to work.
Some examples of how this money can help are to:
- cover any loss of income;
- cover day-to-day expenses (e.g. power, phone, food, petrol);
- help cover debts e.g. mortgage, credit cards;
- assist with medical costs associated with recovery;
- seeking specialist or alternative treatments that may otherwise be unaffordable;
- paying for home alterations, rehabilitation and home help;
- take time off work to concentrate on rehabilitation and recovery which will enable you to return to work much quicker.
Child Trauma Benefit
One insurer, Partners Life, also includes a child trauma benefit which is inbuilt into a parent’s trauma cover. A feature of this excellent cover is that all children between the ages of 4 months and 21 years have $50,000 lump-sum child trauma cover included at no additional cost.
While – at first sight – it may appear that such child trauma cover is “academic” as being unlikely to ever be required, Partners Life has advised that it has now paid out 70 child trauma claims in 8 years! One of these was for the 5-year old son of one of our clients, who was recently diagnosed with acute lymphoblastic leukaemia. The $50,000 pay-out Theo arranged for his clients, through the child trauma benefit of the parents’ critical illness insurance policy, was a huge benefit to the family, as the mother was unable to work for the next year, while she cared full-time for their child. In addition, Partners Life provided a 6-month premium holiday to the family, meaning that in these circumstances, they didn’t have to pay their insurance premium for 6 months. However, their policy still remained in full force.
Helping In Times Of Trauma Where We Can
Unquestionably, the Partners Life child trauma benefit is an exceptional, free, inbuilt benefit and UProtectNZ Insurance Services was humbled and honoured to have been in a position to be able to assist the family during this difficult time. That’s what Theo’s role as the family’s insurance adviser enabled him to do.