What Is Trauma Insurance – What It Covers & Advantages And Disadvantages

Many difficulties arise when dealing with severe illness and injury, including financial stress. Having a good knowledge of trauma insurance will save you from this challenging situation and help you concentrate on improving. This article will discuss what trauma insurance is, what it covers, and its advantages and disadvantages.

What is trauma insurance?

Trauma Insurance, also referred to as Critical Illness Insurance, offers a one-time payment of a lump sum to an insured if a traumatic event happens to them which needs extensive medical treatment. Such traumatic events can include heart attacks, severe burns, permanent blindness, advanced cancer, stroke, major organ transplant, Alzheimer’s, etc.

Trauma Insurance
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Benefits of Trauma Insurance

One of the benefits of trauma insurance coverage is that the insured can make multiple insurance claims over a lifetime. Some other benefits include the following;

  • Broad Eligibility: Individuals between 16-65 can apply for trauma insurance from some insurers.
  • Long Policy Timeframes: Though policies vary for different states, most trauma insurance policies last until age 70.
  • Financial assistance through a Lump sum payment: When a person covered by trauma insurance suffers a critical illness included in the policy, they will be paid a lump sum to sort their bills, including medical or recuperation expenses, living costs, or debt settlement.
  • Inflation Proofing: Trauma insurance has inflation proofing which maximizes coverage yearly to stay on top of inflation rates.

 Conditions covered by trauma insurance

When making an insurance claim, the insurer expects you to have a medical statement regarding the illness or event to support your claim. First, this medical report must be obtained to get the support you need faster. Some of the severe conditions an insured can claim for include the following;

  • Major head trauma
  • Severe burns
  • Organ failure
  • Cancer
  • Loss of limb.
  • Heart attacks, Etc.

 How trauma insurance works

Trauma insurance makes available a lump sum payment that you can use to cover medical and regular living expenses without paying out of pocket; this translates to you concentrating on getting back to your feet without worrying about financial issues relating to your recovery.

Pros of Trauma insurance

Some of the advantages of trauma insurance include the following;

  • Trauma insurance payout is usually tax-free
  • Trauma insurance reimburses a lump sum payment.
  • You can associate this policy with others like TDP and life insurance.
  • You can use the trauma cover payment to take care of the costs of your recovery.
  • Trauma insurance usually covers up to sixty critical conditions, which differ based on your insurer and the policy type.
  • You can choose among numerous policy options when you purchase trauma cover.

Cons of Trauma insurance

One of the disadvantages of trauma cover is that it only takes care of specific illnesses outlined in your Product Document Statement. Some conditions, like severe pain, mental illness, or sports injuries, which can make you incapacitated, are generally not covered by trauma policy. Other disadvantages are;

  • All critical conditions covered in the insurance policies have a 90-day waiting period.
  • The cover might not apply during retirement  
  • Surviving at least 14 days from the day of diagnosis is a requirement to receive your trauma benefit
  • Trauma cover can be expensive if you resolve to a stand-alone policy.

What trauma insurance doesn’t cover

It is worth noting that some conditions are not covered by trauma insurance, primarily if they occurred within 90 days of applying for coverage. Also, there will be no payout if it’s a case of attempted suicide or deliberate self-inflicted harm. The trauma cover does not apply to minor medical cases, even if it looks severe. To best understand what is covered in your trauma insurance, it’s appropriate to review the details of your policy document and the product disclosure statement. Also, you discover the medical conditions not included on the cover. This information will help you ensure you have the right coverage needed.



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