Life Insurance or Trauma Cover – Should You Consider One, Or Both?
When you’re considering protecting against the ‘worst-case scenarios,’ Life and Trauma insurance might be options that you’ve thought about. We’re making it easy to understand what type of cover these insurance options provide. As we share, some people might decide to select one of these insurance types. For others, they might prefer to have both.
Let’s start with the differences between Life and Trauma insurance. While they both offer essential protection, the circumstances when you might rely on them are quite different.
How Life Insurance Works
Life insurance is there to protect the ones you love if you pass away. It means they don’t have unnecessary financial pressure and stress during a traumatic time.
Life insurance can help your family and whānau manage unexpected expenses like funeral costs or paying off any outstanding debts.
The amount of financial support your loved ones might need could be considerable. Life insurance means that you’re thinking ahead to help them – when they need it most.
How Trauma Insurance Works
An easy way to understand Trauma insurance is to think about it as being ‘life insurance for the living.’ It’s there to help if you have a serious health event or experience a critical illness – such as cancer, a severe heart attack, or a stroke. These types of illnesses will dramatically change life as you know it. It could also mean you might not be able to work and earn an income.
Unlike life insurance, you can claim Trauma insurance while you’re alive.
Unlike income protection insurance, you can claim Trauma insurance even if you can continue working after your recovery.
You could also choose to have Trauma insurance as an ‘accelerated benefit,’ where it is part of your Life insurance policy. This option could allow you to have Trauma cover at a lower premium cost.
The key benefit of Trauma insurance is that it allows you to focus on your recovery, and not on the costs that this might involve. As a lump sum payout, it could be used towards expenses like medical care, rehabilitation, or to help make your home wheelchair accessible.
This is likely to be an incredibly tough time – and it’s one when you don’t want to have to worry about the money involved to help you get better.
How Life And Trauma Insurance Complement Each Other
Life and Trauma insurance offer you the benefits of complementary cover:
Sequential Protection – Life insurance supports your family when you pass away, while Trauma insurance assists if you suffer a serious health event. Together, they offer peace of mind for both you and your loved ones.
Comprehensive Cover – Holding both types of cover gives you broader protection. If you survive a serious illness but face a lengthy recovery, Trauma insurance can support you as you recover. In some cases, the illness may be so severe that it leads to death. That’s when Life insurance would provide financial support for your family.
When You Should Consider Having Both Life Insurance and Trauma Insurance
While everyone’s health and life circumstances are different, here are some key things that could help you decide if having both Life and Trauma insurance could be right for you:
Health History – A family history of serious illness may increase your risk of a health event.
Financial Stability – Think about how important it would be to you and your loved ones to have financial security during a potentially very difficult time.
Peace of Mind – Having both Life and Trauma insurance gives you comprehensive cover, no matter what happens with your health.
Secure Your Future To Help You Live Your Best Today
While it’s something no-one likes to think about, getting the right insurance cover today is a very smart move – and it’s a decision that your family and loved ones might be extremely grateful that you made.
If you’re not sure where to start, talk to one of our friendly IFAA advisers today. They’ll help you decide which options are ideal for your needs, stage of life, and your budget. Having expert advice from an IFAA adviser will help ensure you’re protected, no matter what life throws your way.