In Australia, critical illness cover may be commonly known as trauma cover. Practically all life insurances in Australia may be written on a yearly renewable term. Researches show that around 95 percent of critical illness policies in Australia may be temporary. Also, premium rates may be constantly reviewed. Let’s have a look at how critical illness insurance developed in Australia.
The premium rates for critical illness cover may have been rising considerably. An increase of around 14 percent may have been noted on basis of a total premium income during the year 1997. During the same year the new business premium may have already been around 15 percent. These may have been due to prepayment riders on term insurance. Standalone critical illness covers may have also been introduced. But fewer sales may have been recorded similar to markets like the UK, South Africa and Canada. Thus, the product may have been unsuccessful in Australia. Insurers may have also succeeded to integrate a waiting period related to critical illness cover in the Australian insurance market. Expected results may have not been seen. At the time being, an extension of the waiting period for up to five months, especially for a critical illness like cancer may be under negotiation. Furthermore, two companies may have extended their terms and conditions. By doing this, they might have been able to include certain exclusions in their critical illness policies. However, this may be done either if sufficient medical progress had been made or to alter certain critical illness definitions. Therefore, policyholders may be made aware three months prior to such a change. This type of change may normally tend to happen with critical illness policies that have premium guarantees. Moreover, insurers may also be adding more critical illness conditions in their policies for better competition. Some policies may even include coverage for around 32 critical illness conditions. Cases like loss of independent existence and juvenile cover may now started to be offered. The development of critical illness cover in Australia may have been slightly different from that of more mature markets like UK and South Africa. Here we may notice that critical illness cover does not display all its aspects. For example waiting period, survival period, reinstatement of critical illness cover, reinsurance of critical illness cover, etc. One reason may be because the product may still be relatively new in the market. As a matter of fact people’s knowledge about the subject may not have broadened yet. Another reason could be that insurers may have not yet produced brand new critical illness designs that may have attracted potential consumers. But the development phase is still on and may not be long before critical illness sales reach a peak in Australia. Whether called trauma cover or critical illness cover, the basic function of this insurance may remain the same. Critical illness cover may provide benefits upon the occurrence of a life threatening illness. Having a critical illness cover may certainly save your life and at the same time shield your family from a potential financial avalanche.
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