Trauma insurance, or crisis recovery insurance, provides a one-off lump sum payment
when the insured person suffers from a specific medical condition or event that
is specified in the policy.
The main purpose of trauma insurance is to ease financial burden associated with
recovering from prescribed trauma events by paying for medical expenses, serious
debts to assist with faster recovery and allow any lifestyle changes due to the
debilitating trauma e.g. wheel chair access to the house.
Generally the illnesses are common, often sudden onset, often critical and traumatic
and in many cases recoverable or not terminal a short period of time .Some examples
are heart attack,cancer,stroke,heart valve surgery, major organ transplant and chronic
kidney failure and also some less common serious diseases.
Chances of suffering a critical illness
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Facts about critical illness
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Number of people diagnosed with a critical illness each year?
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154,000
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Number of people who suffer heart attacks each year?
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26,000
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Number of people who suffer strokes each year?
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40,000
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Number of men who suffer cancer during their lifetime?
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1 in 3
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Number of women who suffer cancer during their lifetime?
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1 in 4
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Source: Bureau of Statistics, National Heart Foundation and
National Stroke Foundation.
In most cases whether or for how long it prevents a person from working is irrelevant.
As a result it is generally accepted that trauma insurance would not be purchased
by a superannuation fund on the lives of its members.
This product is not related to employment so that people who are full time home
duties or in uninsurable employment have a chance to be insured for trauma. Ages
16 to 65 are usual candidates with policies generally able to be renewed to 65,
even 70.
With few exceptions, once a trauma claim is paid the trauma cover ceases, though,
many contacts then allow the trauma cover to be re purchased as term life cover
after a period, without further underwriting.
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