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Trauma Insurance - The Facts and Statistics

Col Lea | Thursday, March 10, 2016

Feeling Lucky?


Chances of Winning Powerball (First Prize, Standard Entry - 12 game panels)

1  in  4,581,596

Chances of First Prize $5 Scratchie ($250,000 - Qld)

1  in  750,000

Chances of Winning Saturday Gold Lotto

(First Prize, Standard Entry - 12 game panels)

1  in  678,755

Chances of Suffering A Traumatic Event During Your Working Life

1  In 2

Source: Golden Casket "Have Fun & Play Responsibly", Nov 2004 & ABS, Year Book 2002 Health – Special Article Chronic Diseases and Risk Factors

There has been a lot of discussion in the media this week regarding insurance cover following on from Monday’s 4 Corners report into Comminsure. One of the big issues raised related to the non-payment of a lump sum insurance benefit following a policy holder suffering a heart attack. This has caused a lot of consumers to review their insurance cover, including trauma insurance, why they should hold it or if they don’t hold it, why they should.


What is trauma insurance?

When you suffer a serious illness, the impact on your life is likely to be enormous. The financial impact can also be devastating if you’re not adequately prepared for it. Trauma insurance provides you with a lump sum payment if you suffer an insured major medical trauma. The actual events covered vary between insurers, but some of the most common ones include:

  1. Heart conditions.
  2. Neurological conditions — dementia, motor neurone disease, Multiple Sclerosis, muscular dystrophy, paralysis, Parkinson’s disease and stroke.
  3. Blood disorders — aplastic anaemia, medically-acquired
  4. HIV, occupationally-acquired HIV
  5. Cancers and benign brain tumours.
  6. Organ disorders — like chronic kidney/liver/lung failure, coma, loss of hearing/speech, major head trauma, and severe burns.

Each of the above insured events is usually medically defined within the policy, and the definition must be satisfied to be eligible for a benefit payment. For example, it is not sufficient to simply be diagnosed as suffering from cancer, the type and severity of the cancer must meet the definition within the policy.

What this means to you?

The payment of a lump sum from trauma insurance is designed to help you and your family obtain the financial support you need to get through a major illness without the financial upheaval. This money can help you:

  1. pay for the best medical care, both here or overseas
  2. access the full range of rehabilitation services
  3. pay for someone to come and help you around the house
  4. change your lifestyle if required (eg reducing your working hours or taking an extended holiday).
  5. help with mortgage repayments.

Insurance policies will often vary in their features and benefits, so you should work with your financial adviser to choose a policy that suits your needs and your budget.

What are the Statistics in relation to claims?

While claim numbers will vary from insurer to insurer, I have used the following data from OnePath to illustrate the claims paid in a calendar year, the cause of those claims, and some sample case studies to show that not every Trauma claim will be the same.

  • An estimated 375,800 people (205,800 males and 170,000 females) had suffered a stroke at some time in their lives.(1)
  • Many diseases can cause dementia, with the most common being Alzheimer disease, estimated to be responsible for about 50–75% of dementia cases.(1)
  • Multiple Sclerosis is a chronic debilitating disease of the central nervous system. It is the most common neurological illness among young adults. Most people are diagnosed in their 20s and 30s, and 75% of them are women.(2)

1. ‘Australia’s Health 2014’ – Australian Institute of Health and Welfare, May 2014
2. ‘Basic needs left wanting for 20% people with MS’ –, February 2015

 Source: OnePath: The Facts, Figures and Faces, 2014



While everyone likes to think that these trauma events will not happen to them, life is full of uncertainty and unexpected turns of events, so it makes sense to consider putting in place appropriate cover now, as well as reviewing existing cover to ensure medical definitions have been updated. Should the worst happen, having a lump sum trauma benefit payment will mean that the worry of funding treatment will be mitigated or removed, as well as provide an opportunity to take time off work while you recover.

If you would like to discuss how Trauma insurance can protect you, or if you would like to conduct a review of your existing insurance cover, please contact Colin Lea at the Carey Group on (07) 4760 5900 or email to request an obligation free appointment.

Disclaimer: Carey Financial Pty Ltd is an authorised representative of Securitor Financial Group Ltd and provides financial planning services for superannuation, managed investments, personal risk insurance, shares and self-managed superannuation fund investment advice.

This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs.  Because of this, you should consider whether the information is appropriate in light of your particular objectives, financial situation and needs.