Trauma cover

Think of the trauma

Trauma cover is also referred to as 'critical illness' cover or 'recovery' insurance.

A serious illness can make it difficult or impossible for you to continue to work. If this happens, you will need to find a way to support yourself and your family. Trauma cover can provide a financial safety net for such events.

Trauma cover

Smart tip

When purchasing trauma cover, take into account what other types of life insurance you need, such as life cover, total and permanent disability cover and income protection.

Trauma insurance provides cover if you are diagnosed with a specified illness or injury. These policies include the major illnesses or injuries that will make a significant impact on a person's life, such as cancer or a stroke.

Trauma insurance pays a set amount. This can be used for things like:

  • Any private medical costs above your health insurance
  • An income stream if you stop working, but find out about income protection first
  • The ongoing cost of any therapy and special transport costs
  • Adjustments to housing and lifestyle changes
  • Debt repayments

Do you need trauma cover?

When deciding if you need trauma cover, think about:

  • Your level of private health insurance
  • Other types of life insurance you have, especially through your super fund
  • How much income you and your family will need to live if you can't work for a while or forever
  • What help or family support is available to you
  • What government benefits or workers compensation is available to you

If you're working, income protection insurance may better meet some of these needs.

Choosing trauma cover

You can purchase trauma cover from an insurance company directly or through a broker or financial planner.

Think about whether you want stepped or level cover.

Some super funds offer trauma cover. To see what level of cover you have through your super fund:

  • Check your member statement
  • Contact your super fund by phone or through their website
  • Read your product disclosure statement (PDS)

Be honest with your insurer

You must 'tell it like it is':

  • When you buy or renew a policy
  • If you make a claim
  • If your circumstances change

Failing to 'tell it like it is' means you may not be covered.

When applying for trauma cover for the first time, you need to be completely honest about your personal history. If you don't disclose certain injuries or illnesses from your past, your claim may be denied, leaving you with a worthless policy.

Like all forms of life insurance, you need to do your homework when working out if you need trauma cover.

Related links

Last updated: 05 Jun 2015