Trauma Insurance

Trauma Insurance FAQs

What is trauma cover?

Trauma insurance is designed to provide a one-off lump sum to manage the financial impact if you're diagnosed with one of the critical illnesses or injuries listed in your policy. You can use the payout as you choose - to replace your lost earnings if you're taking to take time off work, to cover the treatment you need, or to go on a long vacation and spend quality time with your family. It's up to you.

What is classed as a critical condition?

The list of covered critical conditions varies from insurer to insurer, but generally speaking, most comprehensive trauma insurance policies cover approximately 40 medical conditions. Among the standard conditions that will typically be covered are common illnesses and medical events like cancer, heart attack, stroke, and terminal illness. Depending on your policy, you may also be covered for things like Alzheimer's disease, blindness, chronic liver or lung disease, major head trauma, Parkinson's disease, severe burns, and severe diabetes (to name a few). There are also 'partial payments' from some insurers for some conditions that aren't quite as severe too. It's important to read the policy document carefully to ensure you know what's covered and what's not.

Can I use Trauma cover if I lose my job?

No, trauma insurance only pays out if you suffer one of the critical medical conditions and injuries that are listed in your policy. You don't need to be off work to claim. However, the one-off trauma insurance payout can give you the freedom to take some time off work to focus on your recovery and your family, without the added stress from medical bills, lost income and other financial commitments (e.g. your mortgage).

What happens when I click 'Apply Now'?

You will fill out the online application form for your chosen insurer. This application form is on the LifeDirect website and we will not submit it through to your insurer until it is complete and signed by you.

Who are the policy owners or beneficiaries?

You can choose the "policy owner" (this is the person that the insured amount is paid to if a claim is made). The policy owner could be you, or if you're setting up cover with a partner you can choose to have a "joint" policy, which means that you both own the insurance.

Can I change the owner of my policy at a later date?

Yes, you can do this at any time - just contact us and we'll send you a "Transfer of Ownership" form.

How much will trauma insurance cost me?

Premiums are based on your age, gender, smoking status, and the amount of insurance you are setting up. Compare trauma insurance quotes (insert link to multi-compare-page)from NZ's leading insurers to get a better idea of how much your premium payments will be. The costs shown on LifeDirect are the insurers' "standard premiums" and are subject to underwriting (assessment).

Will my premiums increase?

If you have selected a Stepped policy structure then on your policy's yearly anniversary your premiums will increase with age. If your insured amount has increased too (for example with inflation "indexation"), then this will also increase the cost slightly.

If you have selected a Level policy structure then your premiums will not increase each year with age. If you need to lower your cost you can always decrease your level of cover. If you'd like to consider a "level"premium (that does not increase with age) please contact LifeDirect. Importantly, your insurer can't increase your premiums if you become ill after starting your insurance.

What is "indexation"?

Indexation means that every year your insured amount will increase with inflation. For example if you had $100,000 cover and inflation that year was 3%, then your cover would increase to $103,000. This makes sure that the amount of cover you have keeps up with increases in the cost of living. This increase is optional - you can decline it if you'd like. Please chat to us about different options!

What are my payment options?

The most common payment options are Direct Debit or Credit/Debit Card, and these are the two options available through our website. However, with some insurers there are other methods available (e.g. annual cheque), so please let us know when you apply if you'd like to choose a different option.

When will I make my first premium payment?

Not until after your application has been assessed and accepted. If you choose to pay monthly (by Direct Debit or Credit/Debit Card) then you can usually select the day of the month that you'd like you premiums to come out.

What happens if I stop paying my premiums?

If you stop paying premiums, after a period of time (usually three months) your cover will end. If you ever need to change your payment details (e.g. you change bank accounts) just contact us and we'll get it sorted.

Will the Covid-19 pandemic affect my insurance?

For new insurance applications, there are no Covid-19 vaccination related exclusions placed on policies with any of the insurance companies we work with. If, in the future, insurers decide to apply Covid-19 vaccination exclusions to any of the policies offered, the information will be made available to you up front so you can make an informed decision.

If you have existing insurance cover, Covid-19 vaccinations will not have any impact on your policy. Your insurance terms were decided at the time you took out the cover and these cannot be changed.

Do I need to provide evidence of health?

Yes. The "underwriting" (assessment) will be based on the answers you give on our online application form. It is important that you include any relevant medical information that you are aware of. In some cases (but not all) the insurer may ask for further information or contact your doctor for medical notes.

Do I need to see my doctor?

Usually not, however in some cases the insurer may request further information from your Doctor, send a nurse to complete an assessment, or ask you to have a check (for example a blood pressure test, if there is a history of high blood pressure). The insurer generally pays for any test or check up like this.

Are my health assessments free?

Yes. If an insurer requires further information (i.e. writes directly to your Doctor, sends a nurse for a consultation or asks you to have a check) these visits are generally paid for by the insurer. Note that if you already have outstanding tests, recommended by a doctor, the insurer won't pay for these.

Does smoking affect my premium?

Yes, smokers' premiums are higher than those of non-smokers. The good news is that if you stop smoking, the insurer will lower the cost of your insurance (once you're smoke-free for 12 months you qualify as a "non-smoker" in the eyes of insurers!).

What happens if I change my mind?

Not a problem. If you decide you do not want the policy you can cancel it within 14 days of receiving your policy document (this is known as the "free-look period"). A signed cancellation is all that is required. Any premiums paid during the free-look period will be fully refunded to you.

What information do I receive?

Once your policy has been set up the insurer will send you your official policy document. You will also receive access to MyLifeDirect where you can view your policy information online anytime.

What if my circumstances change?

It is important that you keep us up to date with any changes in your circumstances. Please keep us informed of any bank account or credit/Debit card changes as well as updating contact phone numbers, physical, postal and email addresses.

What happens if I need to claim?

LifeDirect is here to help. If you think a claim might be needed, please contact us straight away. We will then contact your insurer and get the claims process underway.

When does my cover end?

Your cover will end if you decide to cancel it or if you stop paying premiums. Trauma Cover policies usually expire at age 65 or 70, check the insurer policy document for more details.

How does level trauma cover work?

When you start a trauma insurance plan you can choose between two types of premium structure: "rate for age" (also called "stepped") or "level". The difference is simple. Rate for age premiums increase every year with age, while level premiums don't increase at all (unless your cover level increases). Level premiums can usually be level until age 65 or 70 - after this they change to rate for age. We show stepped premiums on the LifeDirect site, and it's by far the most commonly chosen option.

The choice between the two comes down to the length of time a person wants to keep their cover. Stepped premiums are much cheaper at the beginning (around half the cost of level cover), but because they increase every year, in the very long term, for example if a person wanted cover through their 70s or beyond, it becomes very expensive. Level cover starts out more expensive (usually double the cost of rate for age), but in the very long term can cost less. You also have certainty around your premiums so it can be much easier to budget for them.

Can I get trauma cover for my kids?

Some insurers have a built in benefit where they will cover a dependent of a life insured listed on the policy. Some insurers also have the option for you to add trauma cover, or more trauma cover, for your kids. Talk to us today about your options!

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