Trauma / Critical Illness (CI) Insurance

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Trauma insurance protects you by paying a lump sum if you suffer a major illness or injury such as cancer, heart attack or stroke.

Benefits

It is important to work out individually what you need to protect and how much cover you need. But the lump sum payment can be used for goals such as:

  • Pay for your treatment and care
  • Gain access to the full range of rehabilitation services
  • Relieve financial pressure by reducing debt
  • Allow your spouse to take time off work to be with you or look after the children
  • Employ a carer, nanny or home help
  • Fund the gap between what you earn and the 75% cover from income protection
  • Give flexibility to amend your lifestyle or spend more time with family.

Without insurance, you and your family or dependents may need to run down savings, sell assets, and/or rely on family or Centrelink for assistance. You may find it difficult to maintain your standard of living or pay for the care and medical assistance you need. This can place extra stress on your recovery.

How it works

You can insure up to 100% of ‘eligible business expenses’ which can include:

  • premise expenses: rent, cleaning, insurance, interest and fees on loan to finance the premises, property rates/taxes, repairs and maintenance, security costs.
  • services expenses: electricity, fixed telephone and fax lines, gas, internet, mobile telephone, postage and couriers, water and sewerage.
  • equipment: depreciation, motor vehicle leasing, insurance of vehicles and equipment, registration of vehicles, repairs and maintenance.
  • salaries and related costs: salaries of employees who do not generate any business income including payroll tax and superannuation (SG) contributions for these employees.
  • other eligible expenses: account keeping fees, accounting and auditing fees, bank fees and charges, business insurances, professional association membership fees, regular advertising costs.

Generally, a business expenses policy is claimable if you become totally disabled and have served your waiting period.
Total disability for business expenses means that due to sickness or injury:

  • You are unable to perform at least one of the important duties of your occupation that is necessary to produce business earnings, and
  • You are not working for earnings, payment or profit, in any capacity, and  You are under ongoing medical supervision and treatment.

Stand-alone Trauma Cover

You can buy Trauma insurance and critical illness insurance as a stand-alone policy that includes just trauma cover and no death or total and permanent disability (TPD) cover. These products have a ‘survival period’ and no benefit is payable if you do not survive this period.

Linked Trauma Cover

You can also purchase your cover so that it is ‘linked’ to your death or TPD insurance. With ‘linked’ covers, if you make a Trauma claim and the claim is paid, the other cover levels will reduce by this amount. Linking your cover in this way can reduce the cost of your trauma insurance. Most policies include ‘buy-back’ options to regain the reduced cover amount after a period of time has elapsed.

Policy Ownership

Trauma insurance is usually owned in your own name. The premium is not tax deductible and the proceeds from a successful claim are paid directly to you as a tax-free lump sum.

Trauma insurance is not available through superannuation.

Consequences

You will not be able to claim a trauma benefit if you suffer certain conditions within a certain period (usually 3 months) from the date the policy commences or you do not fully disclose the required information.

You should always carefully read the Product Disclosure Statement (PDS) and policy document for your selected insurance policy and keep these documents in a safe place.