Removing the trauma from trauma conversations

Olivia Sarah-Le Lacheur, Head of Life Distribution

It's fair to say that when it comes to insurance, the value of trauma cover can often play second fiddle to a conversation about income protection (IP).

When you consider that, in 2016, there were 4,309 trauma claims compared to 63,580 IP claims1 across the industry, you can appreciate the difference in "airtime" these two products receive.

Yet, I think conversations about trauma insurance need addressing. That starts with understanding the value.

For those of us who have been around a while, we know the diagnosis of a trauma cover condition can have a huge emotional and financial impact on a person and their family. Treatment, medication and rehabilitation expenses combined with the reduced capacity or inability to earn an income can mean clients are not just fighting for their life, but fighting for financial survival too.

Working with advisers who are at the coalface, I see the value of trauma insurance every day. In 2016 CommInsure paid more than $1bn in claims, with $100m of that relating to trauma policies.

An example is Alex, who has trauma cover as part of her CommInsure Protection policy. She went to her doctor with an ear infection but ended up being diagnosed with cancer, a gastrointestinal tumour. The tumour was stage 4 and required immediate treatment, but was inoperable. This client has to live with this cancer and while drugs can manage it, drugs can not cure it. The trauma benefit paid to Alex will fund her medication, which is not covered by the Pharmaceutical Benefits Scheme (PBS), allowing her to continue to work and live the life she wants to live.

The harsh reality is, statistics don't lie. About 8% of Australians have trauma cover, yet 7 in 10 Australians know someone who has suffered a traumatic event2. The risk of being diagnosed with any cancer before the age of 85 is 1 in 2 for males and 1 in 3 for females.3 

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