Trauma, or recovery insurance, covers you for specified serious injuries and illnesses that require extensice medical treatment. These illnesses and injuries include sever burns, major head trauma injuries, and conditions such as cancer, heart attacks, strokes and transplants. It is important to keep in mind that conditions covered under trauma vary depending on the insurance providers, most importantly, the severity of the condition is an important criteria. You can find the details of these criteria in the product disclosure statement of every insurance provider.

When deciding out level of cover for trauma insurance, it is important to consider a few things. Firstly, think about how much money your family would need to cope with daily expenses if you were unable to go to work. Secondly, consider the costs of paying for your medical expenses and recovery on top of your existing financial obligations. It is also important to keep in mind any ongoing or future investments and debts you may have - these could be mortgage repayments, car loans or educational costs. You may also want to look at your contingency plans, savings and any assets you may easily be able to sell, e.g. shares, in case of a financial emergency. There is no one-size-fits-all policy when taking out insurance, the level of cover will depend on your financial situation and personal needs.

There are two different options to pay for your insurance premiums - level and stepped. Stepped premiums increase with your age every year, where as level premiums are calculated based on your age at time of the policy application and remain the same until the age of 65. Trauma cover can only be paid out-of-pocket since the change in law in 2014 no longer allows you to fund your trauma via your superannuation.

In the event of an illness or injury covered under your trauma insurance, it is important that you keep your medical records handy. This will make the process of receiving the benefit quicker as your insurance company will request these documents to process your claim. It is difficult enough to deal with a medical emergency without the added strain of financial distress. Understanding the meaning of your trauma cover and how it works can help you focus on your recovery and loved ones when times are rough.