Helping to protect you and the ones you love
Trauma insurance pays out upon a specific diagnosis such as cancer or a medical condition.
- Enjoy peace of mind, when you are covered
- Compare leading NZ trauma insurance policies
What is Trauma Insurance?
Trauma Insurance, also known as Critical Illness Insurance, pays a tax-free cash lump sum if you are diagnosed with severe illnesses such as cancer, stroke or heart attack. You survive for at least 14 days after that event. The number of conditions covered (benefits) varies widely, with cheaper policies often offering fewer benefits. Typically the policy owner also has a life insurance policy as life and trauma insurance provide a broader and better cover.
Trauma insurance is intended to relieve financial pressure so that you can focus on your recovery. The trauma cover payout can be used to:
- Pay out-of-pocket medical costs (not covered by your health insurance)
- Cover living expenses and childcare costs while you are recuperating
- Modification to your home
- Keep up debt repayments and possibly pay down debts
- Make lifestyle changes such as reducing work hours or increasing family time/holidays
Children’s Trauma cover
Trauma cover is available for new born children. Some insurers offer free kids cover. The last thing you want to be worrying about when your child is seriously ill or injured is how much it might cost in treatment and time off.
In addition to cancer, heart attack, and stroke, critical illness insurance policies usually also cover the following conditions:
- Bypass surgery
- Kidney failure
- Organ transplant
This is not a universal list as policy wording varies between the insurers.
It’s important you realise that the benefit you receive from your critical illness insurance policy is your money to use however you want.
First and foremost, you may need to cover out-of-pocket expenses not covered by your health insurance, such as excess and experimental treatments that require travel.
But you can also use this money to replace the income that you or your spouse has lost from missed work due to your illness.
Stay on track with your monthly financial obligations, from your mortgage or rent and car payments to childcare and utility bills, all while keeping up with everyday living expenses.
Is Trauma Insurance worth it?
A serious illness such as stroke, heart attack or cancer often comes when we least expect it.
Imagine being diagnosed with a severe illness and, as a result, not being able to work. How would that affect you and your family financially?
If an unfortunate diagnosis came your way, this kind of insurance could make a difference in how well you can manage financially.
You might be too sick to work; someone else might need time off work to help you; you might face medical costs or need to make household alterations.
How much Trauma Insurance do I need?
A solid financial family protection plan takes the guesswork out of how much trauma cover you need. A critical illness diagnosis most likely will affect your income. The question is, how?
We use a financial mapping tool that helps you visualise and organise your financial life, so you can see and understand your financial picture like never before.
As we create your financial picture, you will have clarity and confidence about how much trauma cover you need.
Do I need Trauma Insurance?
Any change to your income can lead to money problems.
A serious event like a heart attack or cancer can result in a drop in household income, either short term while you are recovering or long term if you are unable to return to your previous job.
Other expenses you might need to pay are:
- the cost of travelling to a hospital or to
- doctors appointments
- prescription charges
These changes can cause money worries and financial hardship.
Critical illness cover is helpful if you don’t have enough money saved to fall back on in the event that you fall ill unexpectedly, or if your employer doesn’t offer an employee benefits package to cover periods of unemployment due to sickness.
Critical illness cover will then pay out a tax-free lump sum which you can spend however you like, for things like
- clearing debt,
- paying medical bills or
- adapting your home to meet your needs.
Types of Trauma Insurance
- Trauma Insurance
pays a one-off lump sum.
- Progressive Care
can pay out multiple times, based on the severity of the illness.
What's the most common trauma insurance claim?
As you consider getting critical illness cover, it will be helpful to look into the critical illnesses claims that commonly pay out.
Most of the claims we get are for cancer, and we often speak to people claiming for heart attacks, strokes, benign brain tumours and benign spinal cord tumours.
Across the board, when comparing paid claims from New Zealand’s leading trauma insurers, the top three claims are:
- Heart attack
Alternatives to trauma insurance
We all dream of winning the lottery and being financially secure for life; the reality is that most of us depend on a regular income to maintain our lifestyle, pay our bills and buy some nice things.
Alternative forms of insurance are not restricted to a narrow pre-defined list of medical conditions.
When you can’t work due to medical reasons, Income Protection Insurance provides income and financial protection that isn’t limited to a narrow set of illnesses.
A regular monthly disability income is excellent if your livelihood would take a significant hit due to a lengthy work absence.
Trauma Insurance That Fits Your Budget
Have you wondered how you would be affected by a critical illness?
Are you looking for a simple, straightforward way to get financial protection for yourself and the most important people in your life?
With LifeCovered, it’s easy.
We will start the conversation about who matters most and what you want insurance to do for you.
Together, we will look at easy-to-understand visuals that give you the big picture perspective and suggest solutions that are right for you.
We can meet in person, via Skype, Zoom, Microsoft Teams, or simply by phone, at a time that works for you.
Start here with a quote.
Frequently Asked Trauma Insurance Questions
The key is to understand the difference between trauma cover and income protection. Most people would benefit from having both policies as they serve different purposes.
Compared to life insurance, trauma insurance seems expensive. That’s because it’s more likely that you will make a critical illness claim than a death claim.
No. Trauma insurance premiums are not tax-deductible, just as the claim benefit is tax-free. You can’t claim back tax on your premiums for a trauma insurance policy. All forms of life insurance, except income protection insurance, are not tax-deductible.
The “big three” medical conditions, namely cancer, heart attack and stroke, comprise the vast majority of trauma insurance claims yearly—nearly 80% of all trauma claims across leading New Zealand trauma insurers.
- Cancer: More than 60% of all trauma claims are cancer-related.
- Heart attack: Comprising 15% of the claims paid out
- Stroke: 6% of all claims paid out are for stroke