Whilst life insurance is something you do for those you leave behind, Trauma insurance is something for you as well as your family. It is often left out of the insurance planning, particularly for younger people. I’m sure that you know someone who has suffered from cancer or some other serious illness. It affects every part of their lives.
Trauma insurance pays out the agreed amount 14 days after diagnosis of one of up to 46 specified illnesses. The majority of claims are for cancer, stroke, heart attack and paralysis. Some conditions, such as major head injury or blindness may be accident-related, but a Trauma pay-out does not impact on ACC benefits. Benefits are non-taxable.
If you hear the word “cancer”, I’m sure the first things you think about are chemotherapy or other treatments. What people tend to overlook are the hidden costs of cancer. Taking time off work to take your partner to the hospital, parking costs, petrol, childcare, café meals and takeaways because you’re just too tired to cook.
I have a client who needed a heart valve replacement. His Trauma pay-out meant the difference between keeping his house and losing it, as his boss tried to fire him while he was in hospital!
Sadly, kids also get sick. Some insurers will cover children for free if an adult has Trauma cover. Starship does a wonderful job for kids, but the parents still need to take time off work.
When you next review your insurances, make sure you have some Trauma cover. Don’t let a medical event become a financial trauma.
Mark Lynch is a Financial Adviser. His Disclosure Statement is available free upon request. Any comments in this column are the opinion of the writer and should not be construed as financial advice.