You can obtain several types of insurance to cover you for injury or illness; total and permanent disability insurance (TPD), income protection and trauma insurance. In this article, we’re going to concentrate on trauma insurance and how it differs to, for example, TPD insurance.
Insurance for injury, illness or death
Most people have insurance on themselves, like life insurance and one or more types of disability insurance like TPD and income protection. This is usually provided through default (or automatic) insurance cover, which they have through their employment superannuation policy. Under the superannuation guarantee scheme, an employer pays a percentage of a person’s wage (at the time of writing this blog, it is 10.5%) into a superannuation fund. Premiums are then deducted from your fund balance to purchase insurance. Through your super, the following types of insurance cover are available:
- Total & permanent disability (TPD);
- Life cover (life insurance or death benefits); and
- Income protection cover.
In a nutshell, TPD insurance provides a lump sum payment should you become sick or injured and unable to return to work. Income protection insurance provides a percentage of your weekly wages (usually 75%) if become sick or injured and cannot work for a period of time. This type of insurance usually has a waiting period before payments commence and a finite period for payments to continue.
Both TPD and income protection cover can be for physical injuries or mental illnesses and also if you become chronically ill. For example, you may claim TPD benefits if you are unable to return to work due to:
Life cover (or death benefits insurance) provides a lump sum payment to your nominated beneficiary or your dependents or those in an interdependent relationship in the event of your death.
Further, if you have been diagnosed with a terminal illness, you might be able to lodge a claim for your death benefit and have that paid to you while you’re still alive.
Where does trauma insurance fit compared to other types of insurance
Trauma insurance, unlike TPD and income protection, is not available through superannuation policies.
Instead, trauma insurance, which can also be called critical illness insurance or recovery insurance, is insurance usually purchased either directly from an insurance company or through an insurance broker or financial adviser.
You may also get trauma insurance as part of your employment package or through an employer-sponsored or union-organised arrangement.
How is trauma insurance paid out?
Trauma insurance usually pays out a lump sum insurance benefit if you suffer a severe injury or illness. Exactly what “severe” means depends on the definition contained the policy. This is further discussed below.
When will trauma insurance be paid out?
Of course, what benefits a trauma insurance policy pays out and what types of conditions are covered depend upon the terms and conditions of the specific insurance policy. Each policy is different.
An example of the common types of conditions trauma insurance might cover are as follows:
- Multiple sclerosis
- Brain tumour or surgery
- Skin cancer
- Parkinson’s Disease
- Alzheimer’s Disease
- Cancer (various types)
- Heart attack
This is a basic list of conditions a trauma policy may cover and there are also other conditions covered.
A trauma policy could, and often does, cover dozens of conditions, including variations of a condition. So for example, a trauma policy might cover a dozen different types of cancers – breast, ovarian, prostate, testicular, vulva, leukaemia, lymphoma and others.
If you’re unsure if your injury or illness is covered by your trauma insurance policy, you should contact us for free advice.
Call us for free advice:
03 9448 8048
It costs you nothing to find out where you stand.
Depending on a person’s financial circumstances, specific options can be added to the trauma insurance policy. For example, severe ill-health of a newborn is an option some trauma cover policies provide.
Trauma insurance for child/baby-related illness and injury
In one policy, a ‘baby care’ option provided cover for the following conditions:
- Absence of a foot or hand;
- Cleft lip and/or palate;
- Down’s syndrome;
- Infant death;
- Stillbirth; and
- many more.
As usual with any insurance, the devil is in the detail.
It would be overly simplistic to read this blog or consider the above conditions and expect your trauma insurance policy to respond and the insurance company have no questions to ask.
Sadly, that’s not our experience when dealing with insurance companies in any claim, whether a house insurance claim or a disability claim; if it was, we wouldn’t have a job!
Can I claim trauma insurance and TPD insurance for the same injury or illness?
The short answer is yes, but like anything relating to insurance, it pays to check the policy. Call us for free advice: 03 9448 8048
Pay attention to definitions in trauma insurance policies
If you look at any of the medical definitions contained in a trauma insurance policy, you will often find the definitions contain qualifications.
Consider the scenario of a heart attack. Before the trauma insurance is paid out, there may be some hoops to jump through:
- The heart attack may need to be of a certain severity;
- It may require an ongoing permanent disability;
- Any disability may require months to pass; and
- A medical reassessment may need to occur before any payment will be made.
Or, you may suffer head trauma but have to obtain a medical report from a specially trained doctor (which costs thousands of dollars to obtain) before your trauma insurance is paid out.
These are considerations that are beyond the contemplation of the information provided in this blog so, again, if you’re unsure of the specifics of your trauma insurance and whether or not your injury or illness is covered, call us for free advice: 03 9448 8048
What we can tell you definitively is this: if you have received an adverse decision from an insurance company about your trauma claim – whether that decision is to reject the claim outright or pay only a partial benefit – we can tell you whether the insurance company has made the right decision and, if it isn’t the right decision, what can be done about it.
Contacting Berrill & Watson
📞 Melbourne: 03 9448 8048
📞 Brisbane: 07 3013 4300
📞 Anywhere else in Australia: 03 9448 8048
📧 or email us: [email protected]
How we charge
We are Australia's best value superannuation/insurance law firm. Other law firms charge nearly double (& sometimes more than double) what we charge. So, if you get a quote from them, or have a cost agreement, ask us what we will charge you.