Setting trauma sums insured
Clients will ask, of course, and sooner or later the regulator may ask too.
The first big factor is whether you already have income protection in the recommended package. If you so, then trauma cover can be lower, because there may be significant overlap in cover with income protection. If income protection is not in the package (for whatever reason, cost or occupation class), then probably the sums for trauma (and perhaps TPD) should be more substantial.
For ‘domestic’ business, there are three main identifiable approaches based on quote data, in reverse order of usage:
- Buy the same trauma as the life cover amount – which is typically something like the value of a home loan, and results in the largest sums insured.
- Buy $100,000 trauma.
- Buy $50,000 trauma.
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