linked. A claim on a linked trauma policy
will reduce the sum insured on your life and/
or TPD insurance. For example, if you have
$1 million of life and TPD with a linked
$400,000 trauma policy, the amount of cover
on your life and TPD would reduce by the
sum payable. Hence, your $1 million of
cover would become $600,000.
with life and TPD policies owned inside
superannuation. Linking your cover, rather
than opting for a stand-alone policy, will
result in a lower premium.
lose your life cover in the event of claim.
The first is called `Life Cover Buyback' and is
built-in with most providers. It enables you
to literally repurchase the life cover you have
lost 12 months after a claim. If you take the
example above, 12 months after the trauma
claim was payable for a heart attack, you
would be able to reinstate your life cover
back to $1 million.
further. Double trauma (also known as
`Double Living' or `Crisis' options), means
that 14 days after the trauma claim is
payable, the life insurance amount is
on the life cover from that point onwards.
`Double' is effectively referring to a double
claim, as the policy is now free and will
provide a payment in the event of your
death, whether that be in the near future
or even in old age.
`Trauma Reinstatement'. Your eligibility for
personal insurance is always based on your
health history, and following a trauma claim
you are likely to be uninsurable, meaning you
could not purchase more insurance.
months after your claim. You won't be
covered for the condition you claimed on,
but you'll still have the cover if you suffer
from a different defined illness or injury.
tailor the cover to your specific needs.
But these choices can also make personal
insurance seem complicated. Your adviser is
the best person to help find the right policy,
one with a structure that is most appropriate
for you and takes into account your budget
and circumstances.
$300,000 of linked trauma. She is diagnosed with multiple sclerosis and receives the
full trauma sum she is insured for. Her life insurance policy reduces to $500,000. Twelve
monthsafterherclaimsheisabletoutiliseher`LifeBuyback'and`TraumaReinstatement'
benefits. Her life cover increases back to $800,000 and she has a new stand-alone trauma
insurance policy for $300,000.
at this time. Her life insurance will continue for as long as she retains the cover.