| A Perfect Partnership - Trauma Insurance With NZ Life Insurance & NZ Health Insurance |
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| Written by Daniel Fletcher |
| Saturday, 23 October 2010 19:51 |
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Protecting a person's health and ability to earn an income through insurance is essential in order to achieve financial freedom. Sadly, many of us pay little attention to it until it's too late. While disability income insurance replaces a portion of earned income if a person suffers total disability, and health insurance covers actual medical expenses incurred, trauma insurance provides a one off lump-sum payment on suffering a major health trauma, regardless of whether or not this results in total disability.
Protecting a person's health and ability to earn an income through insurance is essential in order to achieve financial freedom. Sadly, many of us pay little attention to it until it's too late. While disability income insurance replaces a portion of earned income if a person suffers total disability, and health insurance covers actual medical expenses incurred, trauma insurance provides a one off lump-sum payment on suffering a major health trauma, regardless of whether or not this results in total disability. I have been involved in the insurance industry for a number of years and I still find it hard to believe the number of people who are prepared to pay high insurance premiums to cover somewhat minor assets, such as boats, motorbikes, cars, etc, yet cringe at the thought of insuring their health and ability to work. The cost of insuring a $15k car could cost in the vicinity of 4 to 5 percent of its value annually while insuring against a major trauma such as a heart attack or a stroke could cost a healthy 34 year old as little as a half a percent of the insured value annually. Annihilation of your retirement savings is the last thing you or your family would want if a major health issue such as a stroke or heart attack were to unexpectedly strike. The start of a major trauma will usually result in a pressing need for some extra cash to clear expenses/debts as well as to cover further expenses which may transpire, such as vehicle modifications, travel, house modifications, etc. Your retirement & savings nest egg could be used up extremely fast if an immediate cash injection is not forthcoming, resulting in your family's financial security being compromised. Most of us will therefore need some form of trauma insurance to avoid an adverse health incident from escalating into a major financial calamity. Don't let the number of listed covered conditions fool you when choosing a trauma policy, The fact of the matter is that the majority of trauma insurance claims are caused by a comparatively small number of conditions, predominantly cancer, heart attack and stroke. Therefore it is extremely important to ensure that these 'predominant' events are suitably covered. Necrotising Fasciitis or "flesh-eating" disease may be highly emotive but the chances of contracting it are comparatively slim, especially when compared to accident related major traumas. In fact it is only relatively recently that some insurance companies have now extended the usual scope of trauma insurance to include serious injury due to accident, as well as recognizing that many trauma conditions are progressive, meaning that their incapacitating effects occur gradually over time. Motor neurone disease and muscular dystrophy are examples of these progressive diseases. The NZ industry standard is to pay these progressive benefits only once the policyholder has become at least 25% permanently impaired. These newer styled products facilitate the need to pay at least a proportion of the benefit upon the actual diagnosis of the condition with the balance of payment being made when the full criteria are met. At least this gives some form of financial assistance at a very emotional and distressing time, with the more significant financial assistance being paid when the other considerable expenses associated with the disease start to arrive. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Visit my site for the best and cheapest NZ Health Insurance and NZ Life Insurance. |