Trauma Insurance ….. The New Life Insurance!


Medically speaking, we are extremely fortunate to be living in today’s world!

If we go back a couple of generations, not only were people dying earlier but mortality rates were considerably higher.

Today life expectancy has increased significantly thanks to advances in both medical treatment & technology.  This trend will no doubt continue over the years further improving our longevity.

The life insurance industry has also evolved over the last few years particularly in relation to the types of cover available on the market.

These changes have reflected or mirrored the trends discussed above relating to life expectancy & mortality.  The concept of life insurance has been around for well over a century.

Back in those days a life insurance policy was your only choice in relation to financial protection.  If you were an adult living in those times you would be fortunate to live to the ripe old age of 50!

This was due to the fact that even the most simplest of illnesses could lead to death, reflecting the standard of medical treatment available at that time.

The good news is that currently we can have confidence from a medical point of view that there is a greater chance of surviving a serious illness or injury.

Survival rates may be on the incline however so too are diagnosis rates.  I read in an article the other day that last year there were tens of thousands of new cancers discovered!

This isn’t the kind of news that you wish to read however unfortunately it’s the reality of the world that we are living in.

So what is your interpretation from the information above?

It basically means that there is a greater chance that we will experience a serious illness although we are less likely to pass away from it!

Trauma insurance falls under the category of ‘living insurance’ as with income protection & TPD insurance.  Unlike life insurance where benefits are paid on death, ‘living insurance’ covers provide benefits to the insured party while they are still alive.

So as important as it is to hold a two million dollar life insurance policy, you won’t see a single dollar of that money should a serious illness occur!

With this in mind & considering that the landscape has changed in regards to medical treatment & technology, we must prioritise & review our insurance.

If I were Prime Minister I would introduce a compulsory trauma insurance scheme!

The figures show that only about 5% of Australians own some form of trauma policy.  This may be due to the fact that very few people are aware of trauma insurance & the benefits of having the cover.

As an industry we need to raise the awareness & attempt to educate the community on the financial risks associated with serious illness.

The average person on the street isn’t expected to know the facts or industry statistics relating to cancer or heart disease!

As an adviser it is my job to ensure that the client is informed not only about the risks of serious illness but also about the details of trauma insurance.

Statistically speaking there is less than a 1% chance that your house will burn down, however you wouldn’t think twice about not insuring your home!

Life insurance statistics show that males have about a 30% chance & females a 25% chance of being diagnosed with cancer prior to retirement!

When you add heart disease & any other serious illness into the equation, the figures are closer to 50% for both males & females!

If I told you you had a 50% chance of winning the lottery, you would be rushing off & buying as many tickets as you can.

This is the attitude that is needed with trauma insurance, however as an adviser I need to properly educate my clients so that they are able to make an informed decision!


Tom George
My role as a Life Risk Adviser involves educating, assisting and providing advice in the area of personal insurance. Follow me on Twitter | Linked In Profile

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