Trauma insurance, often called living insurance or critical illness insurance, is just what the name implies. It is life insurance intended to be paid out while you are still living. Simply put, if you suffer a debilitating injury or illness so traumatic that it has rendered you unable to work for an extended period of time, your trauma insurance will pay out the benefits to you so that you will not face certain financial ruin while you heal.
Each policy covers different illnesses and injuries, so be sure to check the complete list before you sign up for a plan. However, some common ailments and injuries that are typically covered by trauma insurance include loss of limbs, heart attacks, heart ailments, and cancer.
Once you are able to return to work, you would be able to assess your ability to function on the job. Sometimes, the job is too much to cope with because the injury or illness has taken too high of a toll on your body. As a result, if you were to quit working, you would not qualify for Total and Permanent Disability insurance because, even though you couldn’t continue working at your current job, you may be able to function at a job that requires less physicality or stress, or even part-time work. Trauma insurance would be your saving grace in this situation since it pays out based on event diagnosis, and not how it affects the insured.
The purpose of trauma insurance is to make sure that enough money is available to help you avoid any financial stress while you deal with your ailment by paying things like car loans, childcare, mortgage or rent, and even credit card debts. It is also intended to pay toward any medical bills you may incur as a result of your injury or illness.
The majority of trauma insurance plans are similar in nature but, because they do differ slightly, it is important to read all of the details of any plan before signing onto one. Trauma insurance can be purchased separately or in conjunction with a term life insurance plan.