I was recently asked by advisers about the strategies for setting trauma sum insured. Always concerned about compliance this group was interested to have a method which was better than simply 'as much as I can cut back to just what I can afford'. That was the inspiration for my Goodreturns article - at this link. Vital reading before you proceed.
Later, I asked insurers how they think you should set the sum insured. Partly based on the idea that insurers have this cool product, maybe they have an idea about how it can be used. However, it turns out that they pretty much don't have anything more sophisticated than most advisers have been running with: vague ideas that it is really useful stuff, you should buy some, buy as much as you can, probably more if you cannot get income protection... All of which is true, but hardly helps when we need to look at the regulator and justify how we assembled the 'ideal' recommendation.
So I have since turned back to advisers, and asked about the financial impacts of trauma diagnosis/events, where the client does not qualify for another benefit (like income protection or medical insurance payment). I have a suspicion that this forms the core of the 'need' for trauma. If you would like to contribute to this effort, please drop me a line. I shall be sure to share the results with you. Together, we can create a method for a reasonable estimate.
Incidentally, along the way I have had two advisers tell me that their experience with 'windfall' trauma benefits for some clients, and 'cancellations just before a claim event' with other clients, has pushed them to consider severity-based or severe trauma products for their clients.