A sick child is no fun, but a sick Mum is even worse! Our health is a top priority, but many of us have felt at the mercy of feeling ill, either through a simple flu or something more serious.
While many of us just badger on through the usual winter ailments, if we’re really sick, we quickly realise that we’ve got no choice but to surrender.
Our health and well-being is the cornerstone of life. When it comes to insuring it, there are two pathways: Health insurance and/or Trauma insurance.
Health insurance is broadly a surgical/private hospital policy that pays on a reimbursement basis, up to policy limits. Trauma insurance pays a lump sum upon diagnosis of some 48 medical conditions, requiring a survival period of at least 14 days.
Which insurance is superior and can you get by with just one?
First up, as nothing substitutes insurance advice that is both professional and personalised, I recommend that you discuss your age, budget, medical concerns/history and current financial health with a good broker (I’m happy to give recommendations) before a decision is made on what insurance cover is put in place for you.
Below are a few guiding principles to jump-start your decision-making process.
- Do you have existing savings?
Health insurance generally covers elective services that could be delayed in the public health system. The public system waitlist guideline is generally 120 days for non-urgent treatment, however there are exceptions to this. Early diagnosis and choice of specialist can be significant advantages to being proactive about your health, catching symptoms early and avoiding delays in treatment.
Health insurance reimburses the insured person (or policy owner) or in some cases, reimburses a recognised provider directly. One of the great benefits of health insurance is the ability to receive surgical cover up to the actual cost of surgery (without a limit applied. However, specific limits and Usual, Customary and Reasonable (UCR) charges may apply to other benefits such as specialists and tests, meaning that the the total cost of the treatment (including ancillary costs such as travel, accommodation, follow-up treatment and medical incidentals) may be above the amount covered by the policy.
If you don’t currently have a financial buffer in place in the way of savings and sick leave, strauma (and income) insurances are a wise safeguard.
- Do you have existing health concerns?
Both health and trauma insurance require health evidence and may exclude certain conditions.
Certain health insurance policies may cover pre-existing conditions after a specified time period, e.g. three years. If you do have existing health concerns or history, the benefit of using an insurance adviser (over going direct yourself), is that a broker can deliver the best cover terms for you, ‘shopping’ the deal among a few insurers to determine the best acceptance terms for you.
- What are your existing financial commitments?
With a lump sum pay-out (and a portion paid for early stage cancers), the blessing of having Trauma insurance is that the money can be used for whatever you choose. It can buy time (to recover), choice of treatment and cover ongoing rehabilitation and lifestyle changes of your choice.
In essence, you can spend trauma insurance however you like to alleviate financial pressure and help you recover.
On the downside, the policy is generally limited to set definitions for medical conditions. You must reach the level of severity specified in the policy before a claim is paid, meanwhile, you may be unable to work. This is where a tailored insurance recommendation consisting of income cover, trauma and/or health insurance and life insurance really comes into its own.