Specific Condition Cover
Specific Condition Policy that provides a financial safety net should you suffer one of the covered conditions, potentially leaving you unable to earn your regular income or at least interrupting your usual lifestyle. The lump-sum trauma cover benefit is designed to provide a cash injection to help alleviate the financial impact associated with this disruption to your lifestyle and income, so you can focus on your treatment and recovery.
Benefits paid up front
Benefits are paid as a lump sum once a covered condition has occurred, and the benefit amount is a fixed multiple of the sum insured depending on the specific condition. There is no waiting period, so as soon as you suffer the impairment or undergo the procedure and the insurer accepts the claim, you will be paid the applicable benefit.
When accidents happen
There is a likelihood that if you are unable to work that it may be the result of an accident, in which case you may be receiving regular payments from ACC. Traditional income cover reduces the benefit you are entitled to by the amount you receive from ACC, however, this is not the case with Specific Condition Cover. You will always be paid 100% of the benefit.
Less stress at claim time
With traditional income cover, you have to prove that you are unable to work before you will be paid a benefit, and you or your doctor will need to regularly provide further evidence that you are still disabled. However, as Specific Condition Cover pays a benefit based only upon you suffering a condition or undergoing a procedure, you need only provide evidence that you meet the applicable criteria once, when you submit your claim, and your benefit will be paid.
Covered specific conditions
Conditions are divided into three categories:
The most serious conditions such as paralysis, total blindness, or total and permanent disability. Category A conditions pay a lump sum of 60 × the sum insured, which closely equates to five years income. Any payments already made for the same condition under Categories B or C will be deducted from this payment. Once you are paid a benefit under a condition in this category, your Specific Condition Cover will end.
This category includes conditions and surgical procedures which can only occur once, such as a tonsillectomy or blindness in one eye. Category B conditions each pay a lump sum of between 0.5 × the sum insured for procedures such as an appendectomy or removal of an ovary or testicle, up to 24 × the sum insured for permanent partial disability. Any payments already made for the same condition under Category C will be deducted from this payment.
This category includes a range of impairments, surgeries and other medical procedures which, in most cases, are temporary and have the potential to recur. These include bone fractures, the temporary need of a wheelchair, or radiotherapy. Category C conditions each pays a lump sum of between 0.5 × the sum insured for the loss of use of one or two fingers, up to 24 × the sum insured for amputation above the knee or elbow.
Extra childcare help
If you become disabled and as a result need extra assistance with childcare for children under the age of fourteen, your Specific Condition Cover benefit provides reimbursement for these additional costs (up to certain limits).
Bringing you home
If you have been working overseas for more than three months when you suffer a disability and you wish to return home, your Specific Condition Cover includes a return to home benefit which will reimburse you for the costs of bringing yourself and a companion home to New Zealand (up to certain limits).
Increasing benefits to match increasing income
Some companies recognise that your income can change many times during the course of your career and each time your income increases, there is a financial need to increase your Specific Condition Cover to keep pace. The increasing income benefit allows your Specific Condition Cover to be increased (up to certain limits) without further health assessment, whenever your income increases.
The above benefits are summary examples only and may not be a full list of benefits which may be available to you. The exact types of cover and benefits will change depending on the insurer and the specific policy. Please contact me for a comprehensive list of benefits available.
This is a cost effective way of purchasing trauma cover by only insuring for very specific conditions. Our recommendation is to always take this full type of trauma cover or critical care cover, but there is no use in having the cover you cannot afford so this gives the more budget conscious individuals an opportunity to have some form of this type of life insurance cover.