Critical Illness Insurance – Life Insurers Pay Over $1bn In Claims In 2021

Critical Illness Insurance is known by a few names such as Trauma Insurance.  It generally pays a pre-defined lump sum benefit if the insured person has a specifically defined medical episode such as a heart attack.

Each insurer will clearly define what conditions apply for a claim to be paid and they compete on the generosity of these definitions.  These are specified in the Product Disclosure Statement or PDS that they issue.

Trauma insurance differs from other disability insurance like Income Protection or Total And Permanent Disability Insurance in that claims are often assessed regardless of the Life Insured’s ability to work following the medical episode.

Insurance payments can be used for any purpose, such as paying off debts, to pay for medical treatment and to make lifestyle changes (such as reducing working hours).

Insurers offer flexibility in how you can structure such cover. For example, you may be able to link it to your other insurance covers, like life insurance and there are advantages and disadvantages of doing so.  There are numerous other considerations such as taking what is referred to as a “buy back” option.  This cover is not generally offered by superannuation funds but can be linked to other insurance covers structured within a superannuation environment.

A life insurance adviser at Experien Insurance Services can guide you through the considerations relating to Critical Illness Insurance and give you personal advice based on your own needs, circumstances and objectives.

The information provided contains general information and examples and does not take into account your personal objectives, financial situation or needs.

Source https://www.apra.gov.au/life-insurance-claims-and-disputes-statistics

Life insurance and Financial Advice services are provided by Experien Insurance Services Pty Ltd (EIS) ABN 99 128 678 937 and Experien Financial Services Pty Ltd (EFS) ABN 32 631 346 757. EIS and EFS are a Corporate Authorised Representative (No. 320626 and No. 1274354) of Affinia Financial Advisers Limited ABN 13 085 335 397 AFSL No. 237857. See our website for our Financial Services Guide.  Always read the Product Disclosure Statement issued by an Insurer before considering insurance