Trauma insurance (also called critical illness or recovery insurance) pays a lump sum when you're diagnosed with a serious medical condition like cancer, heart attack, or stroke. It covers medical costs, recovery expenses, and income loss during treatment, regardless of your ability to return to work.
Trauma insurance pays a lump sum on diagnosis of a specified serious medical condition, regardless of whether you can return to work. It is known internationally as critical illness insurance.
Unlike TPD insurance (which requires permanent disability), trauma pays when you suffer a defined medical event, even if you make a full recovery.
Australian trauma policies typically cover 40 to 50 conditions, including:
Each condition has specific severity definitions. Cancer coverage typically excludes early-stage skin cancers but covers invasive malignancies.
The benefit can be used for any purpose:
Most trauma policies are standalone, but some insurers offer trauma combined with life insurance in two structures:
Trauma insurance is particularly valuable for:
Industry statistics show cancer and heart conditions represent over 70 percent of trauma claims in Australia.
Premiums are based on age, health, family medical history, occupation, lifestyle factors (particularly smoking), and the comprehensiveness of conditions covered.
Claire, 44, is diagnosed with breast cancer. Her $200,000 trauma insurance pays out immediately, allowing her to access private treatment, take 12 months off work, and cover ongoing expenses during recovery
John, 52, suffers a major heart attack requiring bypass surgery. His $150,000 trauma benefit pays for cardiac rehabilitation, home modifications for recovery, and replaces income during his 6-month recovery period
Amanda, 38, is diagnosed with early-stage melanoma. Because it doesn't meet the severity definition in her trauma policy (typically requiring invasive cancer), her claim is denied, highlighting the importance of understanding policy definitions
Get indicative insurance quotes from 9+ leading Australian insurers.
Explore related insurance concepts