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Trauma Insurance
Published by Scott Miller
Trauma Insurance
Trauma Insurance in New Zealand is a type of insurance that provides financial support in the event of diagnosis of a serious medical condition. It is designed to provide financial relief to help you and your family cope with the additional costs associated with a serious medical condition. Trauma Insurance pays out a lump sum upon diagnosis of a specified medical condition, no matter how long it takes for you to recover.
This lump sum is designed to help you pay for costs such as medical bills, home modifications, disability equipment and other related expenses. In New Zealand, trauma insurance is available from a variety of providers. But it is important to speak with an Adviser so they can compare policies to ensure you are getting the best policy wording at the best price for you and your family. When selecting a policy, it is important to think about the type of medical conditions that you want to be covered by the policy.
Most policies will cover conditions such as cancer, heart attack and stroke, but you may want to look into additional cover for conditions such as depression and anxiety. It is also important to consider the amount of cover you need. You will need to factor in your current financial situation and any potential future costs that may arise.
There are many different “add-ons” and Structures that you need to consider when putting a Trauma policy in place;
Stepped vs Level Cover
A stepped structure, also known as “age-rated”, is a policy where the premium will go up every year that your policy renews. A standard stepped policy will go up not only with age, but also with CPI each year. This can lead to the premiums becoming unaffordable when you get to the age where you really need to use it. A levelled policy, although it may start out a little bit more expensive, will hold that premium price over the life of the policy, and alleviate the risk of large increases in premium each year. I have also referred to this in my previous blog about Life Cover, which provides more of an example of how a Level structure would work.
Trauma Buy Back
If you make a successful claim on your existing Trauma Cover, this will obviously reduce or eliminate the level of cover you have. Trauma buy-back gives you the ability to reinstate this level of cover, normally with an exclusion on the medical event you have just claimed for. If you received a full payment and your Trauma Cover was completely used, the chances of you being able to obtain another Trauma policy is very low, so it’s worth having a Trauma Buy Back included.
Future Insurability
This gives you the ability to increase your sum insured at each anniversary, within certain limits, without the need for any additional medical underwriting.
The other great thing about Trauma cover is that most policies will automatically provide a certain level of cover for your children at no extra cost. We don’t want to think about our children being affected by a Trauma condition, but unfortunately it does happen, and insurers regularly pay out trauma claims for children.
Watch this space for more information and more deep dives into the world of personal insurance. If you want to know more, get in touch with Sarah and come have a chat. You can also find her on Facebook.