Why is Trauma Insurance so Expensive?


Trauma Insurance is more expensive than life insurance because you are more likely to claim it during your working life. This is because you have a greater risk of becoming seriously ill than dying.

In this guide

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Statistics from insurers in New Zealand indicate a much higher likelihood of being diagnosed with a critical illness than premature death before retirement.

However, as is with all insurance, the cost links directly to the risk for the insurer to pay claims. So if the insurance premium seems high, it is because of your probability of a successful claim and getting an insurance payout.

Just how much you pay for Trauma Insurance will depend on various factors, including:

  • your age
  • your lifestyle – for example, whether you smoke and how much you drink,
  • any pre-existing medical conditions you might have
  • your policy sum assured and
  • the length of the policy will also impact the price.

You can reduce the cost of your cover in a couple of ways.

Ways to make Trauma Insurance Cheaper

Insurance companies have introduced Severe or Major Trauma Insurance policies to make trauma insurance less expensive. Another way is to accelerate the trauma cover.

Accelerated Trauma Cover with Life Insurance

An accelerated trauma insurance benefit is a payment that comes off the total sum of your life insurance if you make a claim. Accelerated benefits may reduce your overall life insurance sum insured. However, they can be a cheaper alternative for giving you cover in more cases. You may also be able to buy back the reduced life cover later and re-instate the trauma cover.

A standalone trauma cover policy is without Life Insurance. Therefore, it is usually better value and cost-effective to buy trauma and life cover combined.

Restructure Trauma Cover policy

Severe or Major Trauma Cover is priced significantly lower than a standard trauma cover and can help reduce the premiums significantly.

The threshold to claim is higher than the standard trauma cover, making the cover cheaper. 

What's the cost of Trauma Insurance?

The main factors affecting Trauma insurance premiums are:

  • Age
  • Gender
  • Smoker status
  • Occupation (only if hazardous e.g. explosives handling)
  • Stepped (increasing with age) or Level premium structure
  • Accelerated or standalone cover
  • Add-on options such as life cover buyback option or trauma reinstatement option

The graphs below show how the average trauma insurance premiums increase with age (for stepped premiums).


A trauma insurance policy covers a specific list of diagnoses and medical conditions.

The policy only pays out if you are diagnosed with one of the diseases or conditions listed in your policy document.

Between 50 and 70 diagnoses and critical illnesses are covered. But you can only claim one. Once you claim on the policy and it pays out, the policy comes to an end.

The insurers we compare, offer special reinstatement benefits – it is important to bear in mind that you need to select it at the time you take out the policy.

If you make a valid trauma insurance claim, the lump sum benefit can be used for whatever you want. Some use the benefit payout for everyday living costs and others use the benefit to pay off the mortgage.

Accelerated trauma insurance (where life and trauma cover are combined) will pay out if you are diagnosed with a critical illness, terminal illness or die. A standalone trauma cover policy only covers specific diagnoses and would not pay out if you die while insured.

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