Trauma insurance: a lump sum for the hard year.
Trauma insurance in Australia pays you a lump sum when something serious is diagnosed — cancer, a heart attack, a stroke. It buys you time off, treatment you choose, and room to breathe. That is the bit income protection and TPD don't do.
The gap it fills.
Income protection replaces your pay while you're off. TPD covers you if you can never work again. Trauma covers what a serious diagnosis costs even when you can still work, or while you're getting back on your feet. All three do a different job.
- +Paid on diagnosis
Once the condition meets the wording, it pays. You don't have to be off work to claim it.
- +It buys you choices
Specialist gaps, treatment overseas if you want it, time off work, time at home with your family.
- +It stacks with the rest
A heart attack can pay out on trauma and on income protection at the same time. Different triggers, different jobs.
- +Usually held outside super
The rules make trauma inside super almost useless, so it is nearly always held in your own name.
What people actually claim for.
Trauma policies cover a set list of conditions. The big three account for most claims, but the rest of the list matters — and the exact wording inside each category matters more than the heading above it.
Cancer
The biggest single reason people claim. Policies differ a lot on early-stage and skin cancers — read the wording rather than assuming.
Heart attack
Measured against specific blood tests and heart readings. The wording is tight, and a mild or borderline event can fall the wrong side of it.
Stroke
Lasting damage that a doctor can confirm, beyond a set period. Mini-strokes that resolve are usually not covered.
Heart surgery
Bypass surgery and stents are sometimes paid in full, sometimes only in part. It depends entirely on the insurer.
Transplants and kidney failure
Major organ or bone marrow transplants, kidney failure needing dialysis, and similar. The wording here is usually clear and claims get paid.
Conditions of the brain and nerves
MS, motor neurone disease, Parkinson's, dementia. Whether it pays depends on medical confirmation and how much it affects what you can do.
How the policy can be put together.
Trauma can stand on its own or be attached to a life policy. It can pay smaller amounts for less severe events, and it can be set up to restore itself after a claim. Which suits you depends on what you can afford, how old you are, and what you're protecting. If your income depends on staying clinically active, the page on cover for doctors goes through the traps these applications hit.
On its own
Its own amount, untouched by the life policy, paid in full when a covered condition is diagnosed.
Attached to life cover
Cheaper at the start. But a trauma claim eats into what your family would get, unless you can buy it back.
Smaller payouts
Part of the sum for less severe things — an early-stage cancer, or a stent.
Buying it back
Restores the cover after a claim has been paid, usually once twelve months have gone by.
Cover for the kids
A lump sum if one of your children is diagnosed with something on the list. Cheap, and a genuine comfort.
Wording that improves
Some insurers update their wording in your favour over time. Worth checking if you have held a policy for years.
What is covered, and what isn't.
The policy document draws the line between a claim that gets paid and one that doesn't. Two policies that sound the same in the brochure can read very differently the day a diagnosis arrives.
- +How cancer is worded
Some policies pay in full for very early cancers, some pay part, some pay nothing at all. The same diagnosis can be worth $250,000 or zero.
- +Where the heart attack line sits
Blood test levels and heart readings decide whether it counts. Borderline events are where the arguments happen.
- +The first 90 days
Most policies won't cover cancer or certain heart conditions for the first three months.
- +Telling them everything
Being completely straight when you apply is what buys you a clean claim later. It is the single most important thing you do.
- +It can change
Premiums and the list of conditions can move over the years. We check older policies against what is available now.
Who you're dealing with.
- Your adviser
- Balki Balakrishnan
- Experience
- 12+ years on personal risk
- Member of
- FAAA
- Authorised as
- AR 409415 of La Verne Capital Pty Ltd
- Focus
- The fine print, and whether it pays
- On its own?
- Yes — we will review cover without a full plan
Trauma is one of the four common covers we arrange most often, alongside income protection, TPD, and life. Recommendations require personal advice and sit inside the financial planning licence.
Questions people ask before booking.
Trauma pays you a lump sum when something on the list is diagnosed — whether or not you can still work. Income protection pays you monthly while you can't work. TPD pays a lump sum if you'll never work again. They sit alongside each other. One doesn't replace another.
The big three are cancer, heart attack and stroke. Beyond those, most policies list somewhere between 40 and 60 conditions — heart surgery, organ transplants, kidney failure, MS, motor neurone disease, serious burns. The policy document has the full list, and the list is worth reading.
Yes. There's usually a 90-day wait from the day the policy starts before cancer and several heart conditions are covered at all. Anything you already have is generally excluded too. We go through all of it when you apply, so nothing is a surprise later.
Most people hold enough to cover two or three years of household costs plus the medical bills. The point is to give yourself a buffer through the year after a diagnosis — and the option of stopping work without raiding your savings.
Generally no, you can't claim the premiums — but the payout is generally tax-free, which is the trade. Holding trauma inside super is heavily restricted and hardly ever a good idea.
The other covers
- All personal risk coverHow trauma fits with the other four covers.
- Income protection insuranceMoney each month while you cannot work.
- TPD insuranceA lump sum if you can never work again.
- Life insuranceWhat your family gets if you die.
- Business insuranceCover for partners, key people and buy/sell deals.
- Insurance for doctorsApplying around specialist practice and overseas records.
Information on this page is general in nature. It does not take into account your personal objectives, financial situation, or needs. Read the relevant Product Disclosure Statement and consider whether personal advice is appropriate before acquiring any insurance product mentioned here.
Book a free trauma review.
An hour on the file. We read the policy wording so you do not have to, and tell you whether the cover you hold matches the conditions it claims to cover.