Update to Trauma Cover

New Definitions for Heart Attack Make Trauma Cover More Attractive!

If you’re not familiar with how trauma insurance works, if you are diagnosed with a condition covered in the Product Disclosure Statement (PDS), then your insurance company will pay you either a partial or lump-sum payment based on your policy and the seriousness of the condition. Common conditions include stroke, heart attack, cancer and chronic kidney or liver failure. Although most trauma policies cover heart attack, changes in the definition of what triggers a payment for a heart attack have meant that insurance companies are likely to pay out on many more policies for less server heart attacks.

Heart attacks are diagnosed when there is a death to a proportion of the heart muscle for an individual. Usually this is detected through ECGs, chest pain or changes in the level of an enzyme know as Troponin which is emitted when there is death in heart muscle. What is causing a stir in the insurance industry is that the definitions in PDS’ for the level of Troponin required to trigger payment (or partial payment) have reduced significantly. Previously, levels of 600ng/L (nana grams per liter of blood) where required to trigger claim. This level has changed to as low as 14 ng/L in some policies. Troponin levels can stay elevated in the blood stream for up to two weeks after the heart has suffered damage.

The practical implications of the new definition is that there will be more payouts for heart attacks. For example, it has been argued that even extreme physical exercise could sufficiently increase Troponin levels above 14 ng/L. With increased payouts it is likely that the cost of trauma cover will increase over time. As of the time of writing this article, Rate Detective have not seen a significant rise in policy prices for trauma, presumably because insurers do not have enough claims history yet to properly adjust prices.

As always when making an insurance decision, refer to the Product Disclosure Statements (PDS).

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