At Prom Country Financial Planning, we are often asked by clients “what are the differences between the offerings of health and wealth insurances?” When discussing Trauma (Critical Illness) insurance with our clients we often hear that clients are confused about and often say, they “have private health cover” and therefore do not require Trauma insurance.
In reality these two kinds of insurance coverage’s are very different, and there can be a belief that if you have private health insurance, all your medical expenses are covered in the event of a significant illness or injury. Yes, health insurance may cover hospital stays and other expenses, but it does not mean that all is covered to the tune of 100%.
We have all heard the stories time and time before, people who were seriously ill or injured had to fork out money (sometimes hundreds to thousands of dollars) to pay for the difference in medical expenses incurred. This has obviously left the individual severely out of pocket and added additional financial stress to the situation.
There are many reasons why personal insurance coverage can help complement health insurance. For the purposes of this exercise, we will specifically look at Trauma (also known as Critical Illness) insurance which can work brilliantly alongside health insurance.
How you ask?
Trauma insurance is not designed to replace private health insurance. It is designed to help fund the financial impact of suffering a critical illness. A Trauma insurance policy pays out a lump sum benefit upon diagnosis of a specified critical illness such as but not limited to cancer, stroke, heart attack and many others. This benefit helps cover things like out of pocket medical expenses and the loss of your or spouse’s income, as time off work would typically be required during treatment. Depending on the type of illness and the severity, the financial impact could be significant.
Please see blow a recent article of young plumber who was in this situation that thankfully was saved:
Financial Trauma impact of not having Trauma cover:
We have seen the stats; Cancer is one of the most dreaded common critical illnesses in Australia. It is without question, an illness that is one of the most expensive to treat with the flow on impact of not being able to work, that will result in loss of income.
Recent examples we have heard of are women who have been diagnosed with breast cancer are faced with out of pockets costs on average of $10,000, but for some, the cost was well over $20,000 despite having private health insurance. Without having the necessary funds available, medical treatment options are often limited because of one’s financial means.
Below is some very real and confronting information regarding Breast cancer:
Could you afford the best treatment?
Having Trauma insurance on top of your private health insurance could be beneficial in some cases to ensure that the best possible treatment can be acquired, or to help fund all those ongoing out of pocket medical expenses. It can also assist in ensuring one’s quality of life and recovery rate without having to incur further financial stress.
The good news is that medical advances are occurring all the time. This has led to higher survival rates due to advances in medical treatment locally and internationally. Unfortunately, this can come at a significant cost and the last thing anyone needs to worry about is finances.
So, the message is simple, private health insurance is important however, that on its own may not pay all the bills. A full comprehensive insurance plan needs to have all the bases covered should disaster strike to provide financial flexibility along with the ability to have access to the treatment required when it is needed.
For further information regarding this article and to review your current circumstances, please contact our office on (03) 5674 3344.
Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.
