It pays to have Trauma Insurance

Posted on 14. Mar, 2011 by admin in Insurance

By Marc Fabris, Strategic Marketing Manager, Zurich

While it’s not nice to think about, trauma insurance can be viewed as “recovery insurance” – taking the pressure off while you focus on recovering from an illness or accident rather than worrying about your finances. It should be considered an essential part of any robust wealth protection plan, as the case studies below illustrate.

In each case – taken from actual experiences – better levels of risk protection, specifically trauma insurance, could have helped reduce their financial and emotional stress.

Melissa confronts the impact of an accident

Melissa was a 33-year-old sales executive when she fell off the platform while boarding a train six years ago. One leg had to be amputated above the knee; the other was seriously damaged. Melissa spent three and a half months in hospital, six months in live-in rehabilitation and two months in part-time rehabilitation. During this time, Melissa’s earnings reduced from a $100,000-plus annual sales package to $45,000 in compensation payments. Melissa found her old job too physically challenging and now works for a charity, earning $42,000 per annum. She has moved back in with her parents and spends $205 per month on massage and therapeutic treatments to help deal with ‘phantom’ pain.

Since the accident, Melissa has lost around $250,000 in after-tax income and spent more than $13,000 on treatments. Her state’s no-fault traffic accident compensation scheme pays replacement costs for her prosthetic leg ($70,000 every five years) and specialised shoes ($300 every four months).

What difference could Trauma cover have made?

It’s quite likely that Melissa could have claimed a partial Trauma benefit and a Total and Permanent Disability benefit, and thereby still realised her pre-accident goal of buying a house instead of moving back home.

Tony grapples with illness

Tony was 44, super-fit and working as a police officer when first diagnosed with heart problems. His double bypass operation was successful, but Tony became depressed and took 13 months leave. The police force paid Tony 80 per cent of his income during this time. Five months after returning to work, Tony became depressed and resigned. Two years on, Tony and his wife now rely on her nurse’s income to pay their living expenses, sizeable mortgage and medical bills ($130 per visit for counselling; $300-$400 per visit for the cardiologist). On doctor’s orders, Tony is taking a year off before looking for work again.

What difference would Trauma cover have made?

Despite his employer’s financial support, Tony’s recovery was impeded by the stress of a high mortgage and his fear he may not cope with work as a policeman. Trauma insurance would have enabled the couple to reduce their mortgage and would have given Tony the breathing space to re-evaluate his employment options without money worries.

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