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Trauma Insurance (Critical Illness Cover)

Financial support when you need it most

Trauma insurance pays you a lump sum if you're diagnosed with a serious illness like cancer, heart attack, or stroke. Unlike health insurance, this money is yours to use however you need: mortgage payments, medical bills, recovery costs, or simply taking time off work to focus on getting better.

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Key Facts

50+ Conditions Covered
Including cancer, heart attack, and stroke
Use Money How You Want
No restrictions on spending
Fast Payout
Claims typically paid within 2-4 weeks
Tax-Free Lump Sum
Payouts are not taxed in NZ
See all personal insurance options

What Trauma Insurance Covers

Trauma insurance typically covers 50+ conditions, including the most common critical illnesses diagnosed in New Zealand:

Most Common Claims:

  • Cancer (all stages including early-stage)
  • Heart attack
  • Stroke
  • Coronary artery bypass surgery
  • Major organ transplant

Also Covered:

  • Parkinson's disease
  • Multiple sclerosis
  • Loss of limbs
  • Severe burns
  • Kidney failure requiring dialysis
  • Paralysis
  • Major head trauma

The average trauma claim in NZ is paid out at age 52, that's younger than most people think. Cancer accounts for approximately 60% of all trauma claims.

Why You Need Trauma Insurance

Many New Zealanders assume they're covered, but the reality is quite different:

I have ACC
ACC only covers accidents, not illness. Cancer, heart attacks, and strokes aren't covered by ACC.
I have sick leave
Most people exhaust sick leave within weeks. Cancer treatment and recovery can take 6-12 months.
I have savings
Cancer treatment + lost income + mortgage payments quickly drains even substantial savings.
I'm healthy
1 in 3 Kiwis will be diagnosed with cancer in their lifetime. Health today doesn't guarantee health tomorrow.

Real scenario:

You're diagnosed with breast cancer at 45. You need surgery, chemotherapy, and 6 months off work. Your $100,000 trauma insurance payout:

  • Covers mortgage payments while you recover
  • Pays for private treatment to avoid public waitlists
  • Replaces lost income so your family doesn't suffer financially
  • Funds help around the house (cleaning, childcare, meal prep)
  • Reduces financial stress so you can focus on getting better

Trauma Insurance vs Health Insurance

They work together, not instead of each other. Here's how they differ:

Health Insurance:

  • →Pays for treatment (surgery, specialists, medication)
  • →Shortens waitlists for procedures
  • →Access to private hospitals
  • →Covers medical costs only

Trauma Insurance:

  • →Lump sum cash payment (often $50k-$300k)
  • →Use however you want, no restrictions
  • →Covers lost income and lifestyle costs
  • →Pays out once you're diagnosed (regardless of treatment)

Ideal scenario: Have both. Trauma insurance pays your bills, health insurance pays your treatment costs.

How Trauma Insurance Works in New Zealand

Trauma insurance in New Zealand is straightforward: you pay a monthly or annual premium, and if you're diagnosed with one of the covered conditions, you receive a tax-free lump sum payment. The claim process typically takes 2-4 weeks from diagnosis confirmation to payout.

Unlike income protection, which pays monthly benefits over time, trauma insurance pays out once as a single lump sum. This gives you maximum flexibility to use the money however you need: covering your mortgage, paying for treatment, replacing lost income, or funding lifestyle changes during recovery.

Many New Zealanders combine trauma insurance with life insurance and income protection to create comprehensive personal risk cover. Trauma insurance specifically addresses the financial impact of surviving a critical illness, while life insurance protects your family if you pass away, and income protection replaces your income if you can't work due to illness or injury.

We compare policies from AIA, Southern Cross, Chubb, and nib to find you the best trauma insurance for your situation and budget. Each insurer offers different definitions of covered conditions, claim criteria, and optional benefits, and we'll ensure you understand exactly what you're getting.

Additional Trauma Insurance Features

Your trauma insurance may include these features (Buy-Back Option is optional, while Early Stage Payments and Children's Cover are often built-in):

Buy-Back Option

If you claim on your trauma insurance, you can buy back your cover after recovery (subject to health assessment). Ensures you're protected if another illness strikes.

Early Stage Payments

Receive partial payouts (typically 10-25% of cover) for early-stage cancers or less severe conditions. Helps cover costs even if the illness isn't life-threatening.

Children's Cover

Extends trauma insurance to your children (typically up to $50k per child). Covers childhood cancers and serious illnesses at no extra cost in some policies.

Common Trauma Claims in New Zealand

Understanding the most frequent claims helps you appreciate why trauma insurance matters:

Cancer

~59% of claims
Breast, prostate, bowel, and lung cancers are most common. 1 in 3 Kiwis will be diagnosed in their lifetime.

Heart

~16% of claims
Heart disease is NZ's leading cause of death. Average claim age is 55, often during peak earning years.

Musculo Skeletal

~8% of claims
Includes conditions affecting muscles, bones, and joints that can significantly impact your ability to work and daily life.

Neurological

~11% of claims
MS, Parkinson's, motor neurone disease. Often diagnosed in 40s-50s, requiring long-term care and support.

Who Needs Trauma Insurance?

Trauma insurance is valuable for most working New Zealanders, especially:

Parents with dependent children

Ensure your kids are financially secure if you're diagnosed with a serious illness and can't work.

Anyone with a mortgage

Keep up with mortgage payments during treatment and recovery without risking your home.

Self-employed or business owners

No sick leave means no income. Trauma insurance replaces lost earnings while you recover.

Single income families

If your income supports the household, trauma insurance protects your family's financial stability.

People with family health history

If cancer, heart disease, or stroke runs in your family, trauma insurance is essential protection.

Anyone aged 30-55

Peak years for trauma claims. Lock in lower premiums while you're younger and healthier.

Many New Zealanders combine trauma insurance with life insurance and income protection to create comprehensive personal risk cover. We'll help you design a package that fits your budget and provides genuine protection for what matters most.

Frequently Asked Questions

Can I claim on both trauma insurance and ACC?
Yes. Trauma insurance generally covers serious illnesses such as cancer, heart attack, or stroke, while ACC covers injuries caused by accidents. If an accident results in a trauma condition, it may be possible to claim on both as they serve different purposes.
What if my cancer is early stage or minor?
Many modern trauma policies include cover for certain early stage cancers, usually paid as a percentage of the full sum insured. This can apply to conditions such as early stage breast cancer, prostate cancer, and some melanomas. Cover and payment levels vary by policy and will be explained clearly before you proceed.
Is trauma insurance worth it if I am young and healthy?
Often, yes. Taking out trauma insurance when you are younger can mean lower premiums and fewer health exclusions. It also reduces the risk of becoming uninsurable later due to changes in health. Trauma claims commonly occur during working years, not just later in life.
Do I get my money back if I never claim?
No. Trauma insurance works like other forms of insurance, where premiums are paid in exchange for financial protection. If you never claim, it means you remained healthy, which is the best outcome. The value lies in the protection provided during your earning years.
How long does a trauma claim take to process?
In many cases, trauma claims are paid within a few weeks once the required medical evidence is received. The insurer must confirm the diagnosis meets the policy definition. We support you through the claims process to help ensure it runs as smoothly as possible.
Can I have both trauma insurance and health insurance?
Yes. Health insurance typically covers treatment costs such as specialists, surgery, and private hospital care. Trauma insurance provides a lump sum that can be used for income support, mortgage payments, or other living expenses. They are designed to work alongside each other.
What happens if I am diagnosed with more than one condition?
Most trauma policies pay a lump sum on the first qualifying claim, after which the policy usually ends. Some policies offer options to reinstate cover after recovery or provide limited payments for additional conditions. These features vary by insurer and can be discussed during advice.
Does trauma insurance cover pre existing conditions?
Trauma insurance generally covers new medical conditions that arise after the policy starts, often following a stand down period. Some pre existing conditions may have no impact on your cover, while others are commonly excluded or accepted with specific terms. In certain cases, cover for a condition may be reconsidered after a period of being symptom free. This depends on the insurer and the individual circumstances.

Have more questions?

Let's talk

Get the safety net you deserve

Compare trauma insurance from AIA, nib, Chubb, and Southern Cross. We'll find you the best cover at the best price.

Get Free QuoteCall 06 215 4345