When is cancer not treated as ‘cancer’ under your trauma policy?
Trauma, or critical Illness cover is a personal insurance product that provides a lump-sum benefit if you suffer a critical illness that meets the defined diagnostic definition for that condition in the policy wording. The covered critical illnesses are, by their nature, potentially life-threatening if not addressed, and, as a result, can have a significant financial impact.
Trauma cover is therefore an extremely important element of any well-balanced and structured protection plan for you and your family.
What does trauma insurance cover?
While trauma cover can encompass some 50 critical illnesses, the “big three” conditions most regularly claimed are cancer, heart attack and stroke.
All trauma policies offered by mainstream life insurers naturally include cancer. However, progressive innovation in the life insurance market in recent years has seen a move to “severity-based” trauma cover. This offers cover for conditions of different levels of severity and charges a premium that is relative to the seriousness of the condition and the scope of the cover provided.
For example, different insurers offer comprehensive trauma cover which incorporates early-stage cancers. They also offer moderate trauma cover for those cancers of ‘moderate’ severity which are often treatable. They offer severe trauma for more advanced cancers.
What is Serious Trauma cover?
Serious trauma provides cover for severe critical illnesses that seriously impair your ability to work or impact your ability to live a normal life. Because severe trauma cover does not pay benefits for less serious medical conditions, illnesses such as cancer require a greater level of severity before a claim you will . This means that severe trauma is significantly cheaper than “normal” trauma cover.
All life insurance companies approach severity-based trauma cover in different ways. Therefore, it is extremely important that you understand and be sure of the policy wording of the trauma cover(s) that you have in place.
So, back to the rhetorical question in the heading: when is cancer not cancer?
The simple answer is that cancer is cancer. But unless your cancer diagnosis meets the diagnostic definition laid down in your specific trauma policy wording(s), you will not receive a payment when you make a claim.
For this reason, it is extremely important to work with an experienced insurance adviser who knows the variety of trauma policy wordings available in the market. You need to have in place and understand the extent of the cover required to provide security and peace of mind for you, your family and your business, come claim time.
It’s what we do!
Theo Simeonidis
UProtectNZ Insurance Services