What would you do if your child becomes very ill (e.g. leukemia, cancer, meningitis) or has a serious accident (e.g. head trauma, severe burns, loss of a limb)? You might need to become a full-time carer and spend long periods in hospital away from home, and then there’s the medical expenses. Child cover (also called child trauma insurance or child critical illness insurance) pays you a lump sum benefit upon diagnosis or in the event a large number of medical conditions (e.g. cancer, heart attack, stroke, coma, muscular dystrophy, multiple sclerosis, severe burn, paralysis, loss of limbs and blindness), becomes terminally ill or passes away. You can choose how to use the lump sum benefit, but the benefit can be used to cover your living expenses, medical costs, rehabilitation and therapy costs, mortgage repayments, accommodation & transport costs, home modifications and funeral expenses.

Here is more information about child cover:

  1. What is the purpose of child cover?
    Child cover is designed to provide you with a lump sum benefit if your child is diagnosed with a serious medical condition, experiences a serious accident, becomes terminally ill or passes away to help pay for your living expenses if you need to take time off work to care for your child, medical expenses, rehabilitation expenses and funeral expenses.
  2. Paying premiums
    Child cover is usually an added cover on the parent’s or guardian’s policy and the premiums must be paid out of your pocket.
  3. Age Restrictions
    The minimum entry age for child cover is 2 years old. The expiry age for child cover varies depending on the insurer and can be from age 18 to age 23. Most policies can be converted upon expiration to a life and trauma insurance policy without any underwriting.
  4. Underwriting and guaranteed renewability
    Child cover must be purchased through an adviser and is fully underwritten and guaranteed renewable. Fully underwritten means to take out a policy you need to provide information about your child’s medical history. Guaranteed renewable means that the cover cannot be cancelled. Additionally, if your child’s health changes, no exclusions can be added to the policy.
  5. What happens with a trauma insurance claim?
    In order to qualify for a child cover claim, your child needs to be diagnosed with medical condition listed on the policy. Once you have a diagnosis the next step is to contact your adviser (or your insurer if you don’t have an adviser). Claim forms will also need to be completed by you and your child’s doctor to provide information regarding your claim. At claim time, it is definitely to your advantage to have an adviser, who will be your advocate and help you through the process.

General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.
Craig Muldoon (AR 449629), Stress Free Insurance Pty Ltd, (CAR 129267, ABN 68 655 178 377)