Will your Trauma Insurance pay out on Prostate Cancer diagnosis?

Trauma insurance, also known as Critical Illness cover, will pay a benefit on diagnosis of certain medical conditions regardless of whether you can or can’t work. It is one of the easiest policies to claim on but is also the most expensive. Whether a Trauma policy pays a benefit will depend on the definitions in the Product Disclosure Statement (PDS). 

A client recently contacted me advising he was diagnosed with early stage Prostate Cancer. The client had a Trauma policy which had a partial payment for Prostate Cancer and early stage cancers but a full payment for other types of cancers. Whether you get paid at all, partial or full benefit depends on the definitions in the PDS. 

The Prostate cancer was diagnosed as T1c – which is a partial payment (20% of sum insured) under the terms of the client’s policy. Anything less than T1c gets no payment at all. However, there was no further information on a T2  or greater diagnosis. After speaking with the insurer, any diagnosis of Prostate cancer of greater than T1c would be treated as other cancers and full payment should be paid (assuming no exclusions on the policy). Caution: Other insurance policies may have a different definition to this one. 

Following discussion with the specialist, if they remove the prostate, then the diagnosed Prostate Cancer is classified as T2 following surgery. After discussion with the client, it was decided to delay submitting the claim until after a decision is made on treatment options.  If the client needs to take time off work, then he can also make a claim on his Income Protection insurance cover if he is unable to return to work after the waiting period has expired.  

Key takes: 

  • If you need to make a claim, talk to your financial adviser before contacting the insurance company. Your adviser can explain when a condition will be paid out and when it won’t and what questions you need to ask your doctor/specialist before submitting the claim.
  • If your claim is denied, don’t cancel your policy as you may be able to claim again depending on the outcome of your treatment or further tests. 
  • You may be able to claim on more than one policy. 
  • Making a claim will not affect your other existing insurance policies such as Life, TPD and Income Protection as long as you were underwritten (i.e. answered all the health & lifestyle questions) at the time of taking out the policy and don’t make changes that require you to undergo the underwriting process again.  
  • If you try to switch insurance policies after you make a claim, any new policy will have an exclusion on pre-existing and related conditions.  

If you don’t have adequate insurance cover or you would like more information on how you can protect yourself and provide security for your family, please contact your financial adviser – Sofie Korac here or phone on 02 9416 0606

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Sofie Korac is an Authorised Representative (No. 400164) of Prudentia Financial Planning Pty Ltd, AFSL 544118 and a member of the Association of Financial Advisers.

Financial Advice Sydney and the North Shore Office based in Gordon NSW

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