How is Trauma Insurance different from Total Permanent Disability Insurance?

What is Trauma Insurance?

Trauma insurance provides cover for a predetermined range of diseases, which includes events like heart attacks and cancer. These short-term life insurance products are designed to tide you over while you recover.

If you have an insurable incident, the provider will assist you with money to cover your current expenses. They also usually cover rehabilitation and medical treatment costs that your medical aid excludes.

It’s essential to speak to your financial adviser and find out precisely what illnesses the policy covers. The cover amount may differ depending on the disease diagnosed. 

The plan will come into effect as soon as you are diagnosed.

What is Total Permanent Disability Insurance?

The total cover provides an income or lump sum payment for when you become permanently disabled. It is designed to assist you with meeting your expenses if you are unable to work. It’s essential to check when your payouts are likely to come into effect.

There is sometimes an obligatory waiting period after the accident. In the interim, you’ll need to cover your expenses.

Disability policies offering job-specific coverage costs more, but the upside is that you’re covered if you can’t operate in the field.

Other policies only cover you if you’re unable to do any form of work. If you’re a surgeon and lose one hand, nothing stops you from becoming a janitor.

From this perspective, costlier job-specific policies are more secure.

What is the Difference?

The primary difference is at the policy payout.

Trauma insurance doesn’t need disability to claim, but not all illnesses qualify. The cover is there to help you while you’re recovering from treatment.

Disability insurance needs you to prove that you cannot work, either in your own or all professions, depending on your policy terms. The type of illness or injury doesn’t matter if you can no longer work.

For example, if you return to work after a massive heart attack, then it doesn’t count as a disability. It’s the reason many people purchase both types of cover simultaneously.

Feel free to contact us for a professional insurance consultation if you have any further questions.

Additional Reading: What is Trauma Insurance?

Reviewed by Greg Maguire

Greg Maguire reviewed this article to make sure the information is accurate and reflects current insurance practice. It is general advice only and does not take your personal circumstances into account.

Greg Maguire is an Authorised Representative (No. 255354) of AD Advisory Services Pty Ltd, ABN 68 005 830 802, AFSL 237058.

Greg Maguire

Principal

Greg Maguire is the founder and principal of Absolute Insurance, a family-run Perth life insurance broker he runs with his wife Steph. Greg has spent more than 20 years helping Western Australian families and business owners protect what matters most, with life insurance, income protection, TPD and trauma cover from Australia's leading insurers.

Before insurance, Greg was a primary school teacher, and that same patient, one-to-one approach is how he still works today. He takes the time to understand your situation, explains your options in plain English, and stands beside you and your family if you ever need to claim.

Greg holds an Advanced Diploma of Financial Planning from Deakin University and a bachelor's degree from Edith Cowan University. He is an active member of the local community through the Chamber of Commerce and Industry WA and Baldivis Rotary.

Greg Maguire is an Authorised Representative (No. 255354) of AD Advisory Services Pty Ltd, ABN 68 005 830 802, AFSL 237058.