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Trauma/Critical Illness Insurance Case Study (The Importance Of Protecting Your Wealth)
28 January 2021

A friend of mine held a Trauma/Critical Illness Insurance policy for over 10 years.  As her policy reached the anniversary date the annual premium had increased, so after consulting her husband she made the decision to cancel the policy because they thought it was a waste of money.  Sadly a few short months later, she was diagnosed with bowel cancer and has since undergone extensive treatment to remove the cancer. As a result of this she was forced to take a few months of work due to ongoing checkups and therapy. 

Had she retained her trauma insurance, she may have been eligible for a claim.  The reality of the situation is that when we are fit and healthy we tend to think that “it will never happen to me”.   No one has a crystal ball and can predict when they may or may not get sick which makes it all the more important to protect the most important thing impacting your ability to work and that is you.  Trauma Insurance is there to provide replacement income should you not be able to work or pay for medical bills or existing debts.  I would strongly encourage anyone that is considering cancelling their insurance policies due to a premium increase to review all available options before making a snap decision to cancel it.  Once you cancel your policy, it may be very hard to reinstate if your health situation has changed.  Three Options to consider before cancelling completely due to cost may include:

  • Reducing the sum insured (e.g. from $100 000 to $50 000)
  • Reviewing any extra features that may have been applied to the policy that could perhaps be removed so you are still able to retain the standard policy
  • Reviewing other areas of your budget which you could make adjustments to if necessary to ensure that you are maintaining a healthy cash flow

A critical part of any financial plan is protecting your wealth if something was to happen to you.  As highlighted above you never know what may be around the corner.  If you feel you need to re-review your personal insurance situation, Hudson can provide a comprehensive needs analysis to ensure that any insurance cover is tailored to your personal financial situation, needs and objectives.

If you would like to speak with a Hudson Adviser please call 1800 804 296 or submit a contact form directly on our website.





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