Trauma Insurance

Trauma insurance and health insurance: Does it help to have both?

Does your health insurance need company? Or maybe, you're exploring your options and would like to know how health and trauma cover can work in combination?

On the surface, health and trauma insurance have the same purpose: to provide much-needed financial support if you fall seriously ill. But if you look under the hood, you'll find that they're quite different, and depending on your needs they can actually complement one another.

So here are some key things to know, including what trauma insurance is about, when it's worth considering it, and how trauma and health cover can be part of a comprehensive protection plan.

Trauma insurance in a snapshot

Trauma insurance is a powerful type of cover - but also an often 'misunderstood' one. Otherwise known as 'Critical Illness Cover', trauma insurance is designed to provide a tax-free lump sum if you're diagnosed with one of 40-plus serious illnesses or injuries listed in the policy.

  • What's covered? Covered conditions vary depending on the insurer, but in general, things like cancer, strokes, heart attacks and terminal illness are usually always included (unless you have a specific exclusion due to a pre-existing medical condition, of course).
  • You can use the lump-sum payment as you like: Trauma insurance provides flexibility in times of need. You can use the tax-free lump sum as you wish: to fund experimental treatments, afford time off work, or even for a long-overdue holiday with your loved ones. Many people also use it to cover additional expenses like childcare or cleaning services, or to reduce their mortgage and/or credit card debt.

Who is trauma insurance for?

Generally speaking, if you're young, healthy and with no dependents or debts, you might not need trauma insurance right now. However, you may still want to consider it in the near future. Also, keep in mind that insurance isn't just for the milestones you've already achieved - it can also protect the journey that it takes to get there. If you're saving for a home, for example, here's how insurance can help you protect your homeownership dream.

On the other hand, trauma insurance is worth considering now if:

  • You have people depending on your income and/or
  • You have significant debt to repay (like a mortgage or a personal loan) and/or
  • You have limited emergency funds.

Like to know if trauma insurance is for you? As it's often the case with insurance, the answer depends on your circumstances. Get in touch - our friendly insurance advisers are here for any questions you may have.

What about health and trauma insurance - together?

As you'll know, health insurance is designed to cover some big-ticket medical costs - like surgery that would otherwise involve a hospital waitlist, specialist appointments and diagnostics. Plus, it provides faster access to treatment and diagnosis, so you don't have to wait in the public healthcare system.

But there are scenarios where - even with your health insurance chipping in - the ongoing financial impact of a serious illness can be significant. That's where the trauma lump-sum payment can make all the difference, offering you flexibility and choice when you need it most.

Having trauma sit alongside your health cover provides the extra safety net to cover major lifestyle changes and extra healthcare costs.

Ready to explore your trauma insurance options?

You can structure your trauma cover either as:

  • An 'accelerated' benefit, meaning trauma cover is an add-on to your life insurance policy. In this case, the lump-sum payment will reduce your life insurance, if you claim. For example, if you have a $500,000 life insurance with a $100,000 trauma 'accelerated benefit', after you claim on trauma your life insurance will reduce to $400,000 (please note that some policies allow you to reinstate the original level of life insurance after a set period of time). Click here to use our quote compare tool, and get life insurance quotes in minutes
  • A stand-alone benefit, meaning your cover will be paid out as a lump sum without affecting any other insurance: click here get and compare trauma insurance quotes

Not sure which option is most appropriate for you? Give our friendly insurance advisers a call on 0800 800 400 or click here to send us a message.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.

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