Trauma insurance (also called critical illness or recovery cover) pays a lump sum on diagnosis of a defined serious condition — typically cancer, heart attack, stroke and a list of others — whether or not you can still work.
What it’s for
It fills a gap the other covers miss. TPD needs permanent disability; income protection replaces income only while you’re off work. Trauma pays out on diagnosis, so the money is there for treatment, time off, home changes or simply reducing financial stress while you recover — even if you eventually return to work.
The trade-offs
- It’s generally not available inside super, so premiums come from your pocket.
- Payouts depend on the condition definitions in the policy — these vary between insurers and matter enormously.
- It adds cost on top of life, TPD and IP, so it’s about priorities and budget.
Frequently asked questions
What does trauma insurance cover?
A lump sum on diagnosis of a defined serious condition - commonly cancer, heart attack and stroke, plus a longer list that varies by insurer. The exact condition definitions are what decide whether a claim is paid.
Is trauma cover worth having?
It depends on your budget and priorities. Most people cover income protection and life/TPD first, then add trauma if they can - especially with a family history of serious illness.
Can I hold trauma insurance in super?
Generally no - trauma cover is usually held outside super, so premiums are paid from your own cashflow rather than your balance.
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