Compare Trauma Insurance Australia

Compare trauma insurance policies

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Product AUFLI	Maximum Cover	Maximum Entry Age	Expiry Age	Stand alone or Add on policy
TAL Critical Illness Insurance	$2,000,000	62	70	Stand-alone policy or Add-on option	Get Quote View details Compare	loading Fetching your data...
Medibank Critical Illness Cover	$1,000,000	55	65	Add-on	Get a quote for up to $1,000,000 in Critical Illness Cover.	Get Quote View details Compare	loading Fetching your data...
ahm Critical Illness Cover	$500,000	55	65	Add-on	Get a quote for up to $500,000 in Critical Illness Cover.	Get Quote View details Compare	loading Fetching your data...
Real Serious Illness Insurance	$500,000	59	65	Add-on option	Get Quote View details Compare	loading Fetching your data...

What is trauma insurance?

Trauma insurance, sometimes called critical illness insurance, pays you a lump sum if you're diagnosed with a major medical condition. It's often available as an add-on when you take out life insurance.

The payout is tax-free and you can spend it however you like. You might want to use it to cover your medical bills, hire a care assistant or make your home accessible. Alternatively, you could use it to pay off the mortgage or other debts.

What does trauma insurance cover?

Trauma insurance covers critical illnesses and injuries. Below is a sample list from one insurer, but you should check the product disclosure statement of your insurer to know exactly what you’re covered for.

Cancers
Coronary artery angioplasty
Coronary artery bypass
Heart attack
Stroke
Three vessel coronary artery disease
Accidental HIV infection
Alzheimer's disease
Aplastic anaemia
Bacterial meningitis
Blindness
Cardiomyopathy
Chronic liver failure

Chronic lung disease
Coma
Dementia
Diplegia
Heart valve replacement
Hemiplegia
Kidney failure
Loss of hearing
Loss of independence
Loss of limbs or sight
Loss of speech
Major brain injury
Major brain injury

Major burns
Major organic transplant
Motor neurone disease
Multiple sclerosis
Muscular dystrophy
Paraplegia
Parkison's disease
Pulmonary arterial hypertension
Quadriplegia
Surgery to aorta
Terminal illness
Viral encephalitis

For your claim to be successful, you'll need to provide medical evidence from your doctor proving that your condition meets the insurer's definition. For example, if you were to suffer a major head trauma, there would need to be permanent neurological damage. Similarly, some insurers won't cover early stage cancers.

How do I calculate how much trauma insurance I need?

Trauma insurance is designed to help you cover the costs of recovery as well as ongoing life expenses in the event you become critically ill or injured. To understand how much insurance you may need, it’s good to consider the following in your calculations:

Debts, loans and other repayments. How much do any of your debts, loans and other repayments amount to? At a minimum, your trauma insurance sum should aim to cover the portion of these expenses that your income is typically responsible for.
Health insurance. Do you have health insurance? This matters because if you don’t, then you’ll need to factor in any medical costs that could occur as the result of an eligible illness or injury.
Family commitments. Are you the primary carer for young children? Would you need to cover the costs for childcare or a nanny?
Ongoing expenses. What are your ongoing expenses to run your household? Consider things like your grocery bill, any quarterly bills and annual payments like car insurance.
General financial security. In the event that you’re unable to make money due to your illness or injury, how much would your family need to remain financially stable?

Once you’ve gone through these numbers, you’ll have a starting point for what kind of cover you might need.

How much does trauma insurance cost?

Various factors influence the cost of trauma insurance, including your age, occupation, smoking habits and chosen financial benefit.

To give you an idea of how much trauma insurance might cost you, we requested quotes from a range of major life insurers who offer standalone trauma insurance policies.

The below should be used as a guide only. Your own costs will differ.

Provider	Annual cost	Monthly cost
TAL	$1,027.84	$93.44
NobleOak	$1,099.06	$96.17
Medibank	$1,277.04	$106.42
ahm	$1,225.92	$102.16
RACWA	$1,311.01	$114.71
HCF	$144.00	$13.00

Pros and cons of trauma insurance

We've broken down the advantages and disadvantages of trauma insurance to help you figure out if it's worth it for you:

Pros

It's tax-free. That means if you expect a $500,000 payout, that's exactly how much you'll get.
Money for medical treatment. A trauma insurance policy can give you the freedom to get the medical treatment you need without worrying about costs.
It can be put towards anything. It can help with expensive medical bills or debts you have, including your mortgage.
It's often bundled with life insurance. It can sometimes be cheaper than buying 2 separate policies, plus it means less paperwork to sort through.
It pays out even if you're not working. Unlike total and permanent disability (TPD) and income protection insurance, you can claim on a trauma insurance policy when you're not employed.

Cons

It doesn't pay out for every illness. Trauma insurance only pays out for critical illnesses such as cancer, heart attacks, strokes, Alzheimer's and other major diseases.
Medical costs may not be that much. There's a chance that the medical costs you incur will be far less than the payout.
Smaller life insurance benefit with bundled policies. The trauma benefit is usually deducted from the overall amount you can claim from your life insurance.

Standalone trauma insurance vs bundled

Bundled life and trauma insurance policies typically cost less than buying a standalone policy because they can reduce life insurance payout. For example, if you claim $200,000 for a critical illness and have life insurance for $1 million, you leave your loved ones with $800,000 when your life insurance pays out.

Life insurance glossary: Key terms to know

A rundown of the tricky definitions for life insurance. Plus, what to look for when you're comparing.

Beneficiary
The person you've nominated to receive your life insurance payment if you pass away or become terminally ill. You can nominate anyone as your beneficiary. There can be more than one beneficiary and each beneficiary can receive different amounts.
Children's insurance
Covers your child for death, terminal illness or a serious injury or illness that's specified in your policy. Typically, children's cover needs to be added as an optional extra.
Finder looked at 16 policies on our database and found just a few give you the option of adding a child to a policy.
Cooling-off period
The amount of time in which you can cancel your policy after signing up – and get a full refund of any premiums paid. The vast majority of insurers offer a cooling-off period of up to 30 days.
Counselling benefit
Some insurers will pay costs for grief counselling sessions for you or your partner. Counselling benefits usually have a limit of around $1,000. It can be claimed after a death or terminal illness claim.
Exclusion
An exclusion is any specific risk or event that you can't claim for under your policy. Insurers can apply exclusions to certain pre-existing medical conditions. For example, they may not cover any claims related to mental health.
Exclusion period
How long you'll have to hold your insurance before a policy exclusion turns into a claimable event. For example, it's common for suicide to have a 13-month exclusion period.
Fully underwritten
With a fully underwritten life insurance policy, your application is assessed upfront. Whereas a policy that isn't fully underwritten is assessed at the time of a claim.
Only 4 out of 16 direct life insurance policies on Finder offer fully underwritten life insurance.
Funeral benefit
Pays a lump sum benefit – usually up to $15,000 – so your loved ones can meet the cost of your burial or cremation without using their own money.
You could look for a funeral policy offering a guarantee that any payout won't be less than the total you've paid in premiums. This is sometimes called a premium guarantee.
Guaranteed acceptance
You can get insurance without having to answer any health questions, or take a medical exam or blood tests.
Guaranteed acceptance policies, also known as auto-acceptance policies, will have an age eligibility requirement. This can range between 16 and 80 years of age.
Guaranteed Renewability
The insurer lets you renew your coverage each year, as long as you keep paying for your premiums. Many life insurers in Australia offer this peace of mind.
Income protection insurance
Income protection insurance pays a monthly wage if you need to take time off work due to a sudden accident or illness. Many insurers will pay up to 70% of your pre-tax income.
Inflation protection
This ensures your premiums keep up with inflation so that your amount of cover is worth as much by tomorrow's dollar. You can ask your insurer to switch off this automatic policy feature, but it could leave you underinsured.
Interim accident cover
Insures you while your life insurance application is being underwritten or waiting to be approved. Typically, interim insurance will cover you for up to 90 days.
Joint life insurance
A policy that covers 2 people, but it pays out one time. A lump sum goes to the other policyholder in most cases.
Joint life insurance can be a cheaper option than two single policies. But it's potentially complicated if a relationship ends.
Level premium
Your insurance generally won't increase in price as you get older. You'll usually pay more in the beginning but they offer more certainty over time. Only a few direct insurers in Australia offer level premiums.
Loading
Essentially, you have to pay a bit more to include your health condition, job or hobby in your policy. Any loadings will be offered during the life insurance application process.
Minimum cover
The smallest amount of insurance (or, sum insured) you can take out. Many insurers in Australia set a minimum cover level of $100,000.
Maximum cover
The cover limit offered by an insurer. It's the most you can be paid out after a claim. Maximum cover limits can range from $500k to $25 million. TAL told Finder it had "no set limit" for a payout.
Maximum entry age
The maximum age you can be to apply for life insurance. Common age caps are 64 or 65, but some providers go up to 70+.
Medical assessment
A medical undertaken for insurance purposes, either for a new insurance policy or a re-assessment of an existing policy.
Some insurers will require you to have a physical examination before you're approved; others will just need you to answer questions about your medical history on your application form.
Monthly benefit
A regular monthly payment if you're unable to work due to illness or injury. It's designed to replace a portion of your regular income. Monthly benefits are a common feature of income protection policies.
Mortgage protection insurance
Insurance that can cover your mortgage repayments if you have a serious illness or pass away. Mortgage protection will only cover your mortgage repayments, not all the other bills you'd need to pay if you lost your ability to earn an income.
Personal accident insurance
Insurance to replace your income if you are temporarily unable to work after an accident.
This cover can be bought as a standalone policy. Keep in mind it won't cover you if you get sick and can no longer work.
Personal insurance
An umbrella term for the following 4 core types of life cover: Life insurance, Total and permanent disability (TPD) insurance, trauma insurance and income protection cover.
Choose the type of cover that best meets your personal situation and needs.
Pre-existing medical condition
A condition you have, or have had, prior to taking out life insurance.
You may be able to get life insurance that includes cover for a defined medical condition. It's likely to cost you more. However, if an insurer thinks your condition is too high risk or isn't under control, they'll exclude it from your policy.
Premiums
The amount you pay an insurer for your cover. Premiums can be paid weekly, fortnightly, monthly or annually.
Price breakdown: How much life insurance will cost you
Premium suspension cover
A policy option that lets you stop paying premiums entirely. You will typically lose all your cover while your policy is suspended.
Not all life insurance policies include a suspension of cover benefit. Check with an insurer directly.
Premium freeze
A premium freeze lets you stop your premiums from increasing as you age.
It's only available with stepped premium policies because the cost rises with age. By activating a premium freeze, your level of cover will drop over time.
Retail life insurance
Buying life insurance through a broker, who will give you tailored advice on securing cover.
Buying a retail policy is one of 3 ways to get life insurance in Australia. The others are directly with an insurer or through your superannuation.
Salary continuance
You can receive up to 75% of your regular earnings each month to cover general living expenses if you can't work due to an accident, illness or injury
Salary continuance insurance is held within a super fund, and you'll pay your insurance premiums from your super balance rather than directly from your bank account.
Smoker status
If you've regularly used a nicotine product in the past year, including vaping, then you will be considered a smoker in your life insurance application.
Typically, to be classed as a 'non-smoker' you'll need to be free of any smoking products for 12 months, but this can vary between insurers.
Stepped premiums
How much you pay for your policy increases each year by a certain percentage. Most policies in Australia have stepped premiums. Yearly increases can range from 2% to 7%.
Term cover
A type of life insurance that provides a set amount of cover for a set amount of time (or, 'term'). The maximum cover offered by term policiescan range from $100,000 to $1 million.
Terminal illness benefit
An insurance which pays out a lump sum if you're diagnosed with an illness which cannot be cured, such as advanced cancer. Benefits can range from around $1 million to as much as $25 million in Australia. It's usually included with a life cover policy.
Total and permanent disability (TPD)
An insurance that pays a lump-sum (as high as $5 million) if you get sick or injured and become permanently disabled. In most cases, TPD cover is available as an add-on when you take out life insurance.
Trauma insurance
A type of insurance that pays out if you are diagnosed with a critical illness or suffer a life-changing injury that's listed in your policy. Examples can include cancer, heart attack and stroke. Trauma insurance pays up to $2 million as a lump sum.
Underwriter
When you apply for cover, the insurance underwriter assesses your level of risk and determines whether the insurer should offer you cover, as well as under what conditions that cover should be offered.
You could check to see if a policy has been underwritten by a major insurer, backed by many years of experience.

FAQs

No. Any premiums for trauma insurance are not tax-deductible. Insurance premiums aren't tax-deductible when the policy pays a benefit for physical injury. This means that all forms of life insurance, except income protection insurance, are not tax-deductible.
However, you do not need to pay tax on any payout, if you ever have to make a claim.
No. As of 1 July 2014, you can no longer buy trauma insurance through your superannuation fund. However, if you were in a super fund that offered trauma insurance before this time, there's a chance you might have a policy. If you're not sure, give your super fund provider a call or check your member statement. This should tell you if you have trauma cover through your super.

Thank you for your feedback!

Written by

Gary Ross Hunter

Editor, Insurance

Gary Ross Hunter was an editor at Finder, specialising in insurance. He’s been writing about life, travel, home, car, pet and health insurance for over 6 years and regularly appears as an insurance expert in publications including The Sydney Morning Herald, The Guardian and news.com.au. Gary holds a Kaplan Tier 2 General Advice General Insurance certification which meets the requirements of ASIC Regulatory Guide 146 (RG146). See full bio

Gary Ross's expertise

Gary Ross has written 644 Finder guides across topics including:

Health, home, life, car, pet and travel insurance
Managing the cost of living

Co-written by

Peta Taylor

Publisher of Insurance

Peta Taylor is a publisher at Finder, working across all of insurance. She's been analysing product disclosure statements and publishing articles for over 2 years. Peta is passionate about demystifying complex insurance products to help users make well educated decisions with confidence. Peta is part of Finder's insurance awards team and works alongside editorial and insights experts to bring users the best insurance products every year. See full bio

More resources on Finder

More guides on Finder

Critical illness (CI) insurance Australia
All you need to know about critical illness insurance, which pays out a lump sum that's often tax-free.
How much does trauma insurance cost?
Everything you need to know about the cost of trauma insurance.
How much trauma insurance do I need?
Trauma insurance pays out for specific health events, such as cancer, heart attack and many more. The costs of these events can vary widely, which makes it hard to find a sum insured that will suit every circumstance.

Compare trauma insurance Australia

Trauma insurance provides a lump-sum payment if you're diagnosed with a critical illness and can be bundled with life insurance.

Compare trauma insurance policies

What is trauma insurance?

What does trauma insurance cover?

How do I calculate how much trauma insurance I need?

How much does trauma insurance cost?

Methodology

Pros and cons of trauma insurance

Pros

Cons

Life insurance glossary: Key terms to know

A-F

G-L

M-O

P-S

T-Z

FAQs

Is trauma insurance tax deductible?

Is critical illness insurance the same as trauma insurance?

Are there waiting periods for critical illness cover?

Is trauma insurance available through my super?

Gary Ross Hunter

Peta Taylor

More guides on Finder

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