Cover the costs of life-changing illnesses or injuries with trauma insurance – a lump-sum payout that doesn’t depend on your ability to work.
THE MiQ DIFFERENCE
What Makes Us Leading Insurance Advisers?
Too many financial advisers recommend insurance policies based on the commissions they receive – not what’s best for your business.
But MiQ is different.
Our approach is holistic: a detailed analysis of your succession plan to see what level of cover is required.
We’re paid by commission – but our diverse APL means there’s no incentive for us to recommend a particular insurer.
And we have access to a network of both internal and external specialists, such as accountants and solicitors, who can support your strategic objectives.
Protecting your business’s continuity starts right here, with us.
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Our Trauma Insurance Solution
What We Do
Trauma insurance is the missing link in most wealth protection plans:
A lump-sum payout to offset costs associated with critical illnesses and injuries – without the tax implications of income protection or the work capacity tests of TPD.
Instead of liquidating assets or using savings to pay for upfront medical expenses, trauma cover means you can navigate the first few years of a life-changing condition without added financial stress.
But, for many people, finding the right level of trauma cover isn’t easy, especially when the premiums of other personal insurances start to add up.
That’s where an MiQ adviser can help.
Schedule a free consultation to discuss your holistic wealth protection strategy – one that protects your and your family’s financial position.
Trauma insurance isn’t the same as cover options like income protection and TPD.
All three can be claimed under similar circumstances, but their payout mechanisms and tax implications are quite different.
TPD, for example, has requirements around your capacity to work – whereas trauma insurance just requires a professional diagnosis of a covered condition.
Similarly, income protection delivers regular payments based on a percentage of your previous income, which may not give you the same financial flexibility that a lump-sum trauma payout will.
It’s also important to note that income protection payouts are taxed at your normal income tax rate.
(Trauma payouts are generally tax-free.)
Your MiQ adviser can explain how different types of cover fit into your wealth protection strategy – and how you can consolidate them to reduce your premiums.
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Your Trauma Questions, Answered
Trauma insurance generally covers extremely serious health conditions such as cancer, heart attacks, strokes, organ failure, and major burns. Your financial adviser can help you go over the product disclosure statements of specific policies to see which exact conditions are covered.
Generally, most trauma insurance policies have clauses around severity or permanency – for example, you might only be able to access trauma insurance for a heart attack if you were left with lasting, severe damage. Understanding exactly what a specific policy covers is important, especially if you’re at a higher risk of certain conditions (through genetic predispositions or a high-risk career).
Normally, self-inflicted injuries and illnesses (for example, attempted suicide or infections acquired through drug use) aren’t covered. Most policies don’t cover mental health conditions either, although neurodegenerative diseases like dementia typically are covered.
Generally, a trauma insurance payout won’t be subject to income tax. Unlike income protection insurance, which is a substitute for income and is consequently taxable, trauma insurance isn’t designed to replace lost earnings, which means it is not ‘ordinary income’ under s 6-5 of the Income Tax Assessment Act 1997 (Cth), nor is it assessable income under s 10-5.
Whether you can get a trauma insurance payout for mental health conditions like PTSD, anxiety and depression depends on the conditions covered by your specific policy. Under most policies, though, those conditions wouldn’t be covered.
Exactly how much trauma insurance you’ll need depends on your personal circumstances and wealth protection strategy. Generally, trauma insurance should be something that you look at after settling on your life, TPD, and income protection policies, so you’ll already have a substantial amount of coverage.
A general rule of thumb is that your trauma insurance should equal $50,000 plus two years’ worth of your current income (excluding passive income from things like investments). Keep in mind, though, that every situation is different. Talk to your financial adviser for personalised advice that aligns with your wealth protection needs and risk level.
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