Critical Illness/Trauma Insurance

This type of cover, generally also known as trauma insurance, is a type of life insurance that pays out a benefit if you’re diagnosed with an illness as defined in your Product Disclosure Statement (PDS), such as cancer or a heart attack. Trauma insurance policies can be bought as a standalone cover or as an add-on to life insurance. It can give you and your family peace of mind by knowing that you have financial support if you’re diagnosed with a serious illness. 

You can typically use the benefit amount from a trauma insurance policy as you see fit. Your trauma insurance policy could help pay for your treatment, make mortgage repayments, cover your medical expenses or simply maintain your lifestyle while you recover.


Do I Need Trauma Insurance?

Whether or not you need trauma cover depends on your unique requirements. However, for most people, buying trauma insurance is an important step to achieving financial security. As you get older your risk of developing a critical illness increase, so you might want to consider adding critical illness cover in your 20s.

• During your 20s you are statistically more likely to get into an accident than develop a critical illness, meaning you have a lower risk profile. 

• When you are deemed a lower risk, insurance companies will generally be prepared to provide critical illness cover at very affordable rates. 

• You might to consider a level premiums structure. Level premiums can save you hundreds of thousands of dollars over the duration of your policy to age 65. 

Which conditions are covered under trauma insurance?

Typically, Standard trauma insurance policies in Australia cover similar conditions, but what differs are their definitions of diseases and the choice of extra benefits, which you’re generally able to add to your policy by paying an additional fee. A Plus policy generally covers a broader variety of conditions, however, they are often more expensive compared to Standard policies. The trauma insurance guide in your insurer’s PDS should help you learn which conditions you’ll be covered for.  

Conditions Typically Covered Under Trauma Cover Its important to refer to your insurer’s Product Disclosure Statement(PDS) to learn about the specific conditions covered by this type of cover. 

However, here are a few of the conditions which are typically covered by a critical illness cover:

• Alzheimer’s disease

• Angioplasty

• Aplastic Anaemia

• Benign Tumour of the Brain or Spinal Cord

• Blindness

• Cancer

• Cardiac arrest

• Chronic Kidney Failure

• Chronic Liver Disease

• Coma

• Coronary Artery Bypass Surgery

• Deafness

• Dementia

• Diplegia

• Encephalitis

• Heart Attack

• Heart Valve Surgery

• Hemiplegia

• Loss of Independence

• Loss of Limbs or Sight

• Loss of Speech

• Major Head Trauma

• Major Organ Transplant

• Medical condition requiring life support

• Medically Acquired HIV

• Motor Neurone Disease

• Multiple Sclerosis

• Muscular Dystrophy

• Occupationally Acquired HIV

• Paraplegia

• Pneumonectomy

• Primary Pulmonary Hypertension

• Quadriplegia

• Severe Burns

• Stroke

• Surgery of the aorta

• Triple Vessel Coronary Artery Angioplasty

What Are The Benefits of Trauma Insurance?

The main benefit of trauma cover is that it pays out a lump sum benefit, which can be used however you want. If you are diagnosed with a critical illness and meet the insurer’s definition of that critical illness, a lump sum benefit will generally be paid to you. You gain complete control over your money and can even invest it.&nbsp 

Generally, the highest lump sum benefit offered by insurers is $5 million. However, the cover amount you choose must be both affordable and financially justifiable. The lump sum benefit is designed to assist you and your family while you recover from your illness:

• Help pay for any ongoing expenses and obligations, like your mortgage and living expenses.  

• Provide an income for your spouse if they are required to take time off to care for you. 

• Help pay for your medical expenses, including treatment and rehabilitation. 

• Providing an income for your family when you are forced to leave work.

Additional conditions typically covered by a Plus policy include:

However, here are a few of the conditions which are typically covered by a critical illness cover:

  • Adult insulin dependent Diabetes Mellitus
  • Burns of limited extent
  • Carcinoma in-situ (CIS)
  • Chronic Lymphocytic Leukaemia
  • Hydrocephalus
  • Malignant melanomas
  • Partial blindness and deafness
  • Prostate tumours
  • Severe Endometriosis
  • Systematic Lupus Erythematosus (SLE) with L

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