While we don’t like to dwell on it – we all know of families that have been deeply impacted by some trauma or crisis. The emotional and financial effects of a family member suffering from a serious illness or injury can be devastating.

Some time ago, a South African heart surgeon recognised this. He was busy putting hearts into patients and fixing them up in terms of their heath. This was all going great until he found many of these patients were back in his surgery suffering from stress related problems – primarily financial issues. The surgeon felt there had to be a better way – the result was the creation of Trauma /Crisis insurance.

Trauma/Crisis Insurance

Trauma insurance provides a lump sum of cash in the event that the insured person is diagnosed with a listed insured event. The most common claims today on trauma insurance is cancer followed by heart attack and strokes. Most quality policies available today cover around 30 to 40 events including major head trauma, multiple sclerosis, paraplegia and so on.

You might not think you are at the age that you’ll be struck down by a heart attack, but cancer doesn’t care about age and can hit someone at any time without warning.

Whilst this is a tough subject to cover, if we understand what the risks are we can protect ourselves and our families against the financial consequences of a critical illness or crisis.

In my financial planning practice, most of the claims we’ve helped clients through are for various cancers, including quite a few breast cancers. We’ve also had claims paid for neurological disorders such as Huntington’s chorea.

Certainly the funds received from these policy claims have made a significant difference to these clients.

Unfortunately I’ve also helped people who suffered from cancers but didn’t have the insurance. In the words of one such person, they have spent more than $100,000 in medical bills and procedures.

How much cover is enough?

So how much trauma insurance is the right amount. This can be a difficult question to answer. A number of factors need to be considered, including managing debt, managing medical expenses and home adjustments.

A good guide is to have enough to clear your total mortgages and debts plus an amount for medical emergencies – say $50,000.

To help you calculate how much is enough for you and your family I’ve uploaded a calculation worksheet on our website.

Don’t be left short if a medical crisis should happen to you or one of your family – look into trauma insurance today.

For the calculation worksheet click to go here

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