Advice matters
How trauma and TPD can complement your insurance cover

Could trauma and total and permanent disability (TPD) cover be a missing link in your personal insurance framework?

While life insurance provides financial support in the event of death, trauma and TPD covers can offer financial protection in the event of severe health crises and disabilities.

Here’s why including these types of covers in your insurance portfolio can offer a more comprehensive safety net and fill potential protection gaps that may exist.

What is trauma and TPD cover?

Trauma insurance, sometimes also known as critical illness cover, pays out a lump sum if you suffer any of the specified critical illnesses or injuries covered by your policy.

Total Permanent Disability (or TPD) pays a lump sum if you meet the criteria for being totally and permanently disabled.

Both trauma insurance and TPD aim to ease the financial burden that may arise from suffering serious health conditions and disabilities, allowing you to focus on recovery and alleviating stress from the financial impact.

How do they fit into an insurance portfolio?

Most trauma policies have specific conditions that they will pay out for, as well as clear descriptions of the criteria required to meet the definition of those conditions.  These can vary between insurers but usually include:

  • Various types of cancer
  • Serious heart attacks
  • Stroke
  • Terminal illness
  • Aorta surgery
  • Artery bypass

They may also cover conditions such as:

  • Blindness
  • Chronic lung disease
  • Head trauma
  • Severe burns
  • Parkinson’s disease
  • Severe diabetes

The more comprehensive policies cover approximately 40 medical conditions.

These policies typically pay out a tax-free lump sum that can be used as needed, such as for treatment costs, general living expenses, or the cost of dealing with the effects of an illness.

Depending on the medical event experienced, and the type of trauma policy, these policies may pay a claim either in full or partially. Traditional trauma policies pay out once per condition, but some insurers now offer the option of multiple claims, for multiple unrelated medical conditions.

TPD also provides a lump sum, tax-free payment which can be used as needed, and is sometimes used alongside trauma insurance to provide extra cover for specified serious and permanent conditions.

An adviser can help you determine what  an appropriate level of cover is for each policy and how they might fit together for your situation.

Like to talk?

If you’d like the peace of mind of knowing that you’re covered financially, get in touch with the SHARE team. As insurance experts, we can guide you through the process of determining what insurance covers are suitable for your situation and objectives and how they can work together to give you an appropriate portfolio of financial protection.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.