Choose the right trauma insurance plan 

This insurance goes by lots of names - some insurers call it "trauma" insurance, others "living assurance", "critical condition" or "serious care" (to keep things simple, we just call it "trauma" insurance). To make things more confusing you can also insure yourself against becoming totally and permanently disabled (TPD) - and some companies offer this as an optional add-on to their Trauma plan, others as a stand alone plan.

What does trauma insurance do?
With this type of insurance you can choose a lump sum that will be paid to you if you suffer certain major health problems - such as cancer, heart attack, paralysis, major burns, and so on. The actual health problems are listed by each plan – the number of conditions and how each is defined will depend on the plan.

What does TPD insurance do?
With this type of insurance you can choose a lump sum that will be paid to you in the event that you're unable to ever work again - totally and permanently disabled.

Do you need it?
Trauma insurance was actually developed with the help of a pioneering cardiac surgeon. He realised that while modern medicine can work wonders, his patients were experiencing major financial hardship after suffering health problems (“curing a person physically and killing them financially” is apparently how he put it…). The upshot is that advances in modern medicine mean you're very likely to live a long life after suffering a major health problem – but the financial problems that this can cause are huge.

The kind of life changing health events we're looking at can be sudden and will certainly have an impact on the way you (or you and your family) live. Although it's hard to say exactly what costs you might face, or exactly how much they'd be - it's important to consider the financial "what-ifs".

A couple of the most common reasons people have for getting trauma and TPD cover are to take care of debt, to provide for family and to cover readjustment costs (like home alterations etc), but the actual amount of cover that's right for you (or whether you need it at all) will come down to your circumstances. This is not an exact science – there's no magic formula for choosing the 'right' amount of trauma insurance - and the right amount of cover is important to discuss with your adviser.


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