TRAUMA (CRITICAL ILLNESS) INSURANCE
Room to Recover After a Serious Diagnosis
Trauma cover can pay a lump sum on the diagnosis of a listed condition, depending on the policy’s definitions and severity requirements. We’ll help you understand the conditions a policy lists and choose an amount that suits your household.
Our Financial Advice Team Is Here to Help You
We Can Help You
- Go through the condition list in your trauma policy
- Size trauma cover against treatment costs and time off work
- Explain why trauma cover is now held outside super
- Check whether your policy pays a partial benefit
- Review whether cover reinstates after a claim is paid
- Consider trauma cover for a child alongside your own
- Work out how trauma and income protection fit together
- Compare a standalone policy with one attached to life cover
- Clarify how trauma premiums and payments may be taxed
- Support a trauma claim while the insurer assesses the evidence
Who We Help
- Families with a health history of heart disease, stroke or cancer
- Primary earners whose household would feel a long recovery
- Business owners who may have no sick leave to draw on
- Parents of school-age children who would want help through a long treatment
- Couples in their forties looking at cover for the first time
- People recently diagnosed wanting to know what an existing policy covers
- Members with super cover only since trauma is no longer written inside super
- Health professionals who see what a recovery costs their patients
- People with older trauma cover written on a shorter condition list
What we advise on
What a Trauma Policy Pays, and When
What Trauma Insurance Covers
We’ll explain what trauma insurance pays for, and how it differs from the other covers.
Trauma insurance, also called critical illness cover, can pay a lump sum if you’re diagnosed with a condition your policy lists and its definition is met. Payment doesn’t depend on whether you stop working or recover. Lists commonly include certain cancers, heart attack and stroke, and many extend well beyond those.
What the cover does, before any of the detail:
- A lump sum paid on diagnosis where the policy definition is met, whether or not you stop working
- The listed conditions a policy names, rather than any serious illness at all
- Cover that pays even if you make a full recovery afterwards
- Why a trauma policy sits outside super, unlike life and TPD cover
- A separate benefit from income protection, which may be payable at the same time
- Standalone cover, or an option attached to a life insurance policy
- The severity a condition has to reach before a full amount is paid
- Whether cover can extend to your children as an option on your own policy
The Conditions Your Policy Lists
We can read the condition list in your policy and tell you what each one requires.
Condition lists vary between policies and between the years a policy was written, and many extend beyond heart attack, stroke and cancer. The number of conditions listed is only part of the picture. How each condition is defined, including any severity, survival period or other requirements, shapes whether a claim may be paid.
Together, we’ll work through:
- The conditions your policy names, and the definition attached to each of them
- Cancer definitions, which may depend on staging, spread and the treatment required
- Heart attack definitions, which may require measured markers or other evidence beyond a diagnosis
- Stroke and neurological conditions, and any lasting impairment a policy may require
- Conditions added to newer contracts that an older policy may not list
- Exclusions written into your policy at application, and whether they still stand
- How a condition list differs between a standalone policy and one attached to life cover
- The qualifying period at the start of a policy before certain conditions are covered
Severity Thresholds and Partial Benefits
We’ll explain the severity a diagnosis has to reach before a full benefit is paid.
A diagnosis may need to meet a severity threshold before the full sum insured is payable. Depending on the policy, an early stage cancer or a milder heart attack may qualify for a partial payment or may not be covered. Understanding those requirements before a claim can help you set realistic expectations.
What we’ll read with you:
- The severity threshold attached to each major condition in your policy
- Partial payments, and the proportion of the sum insured they release
- Whether a partial payment reduces the cover left for a later diagnosis
- Early stage cancer cover, and whether your policy treats it separately from a full claim
- Any survival period a policy applies before a benefit becomes payable
- Medical evidence an insurer may ask for, and who may need to provide the report
- How severity thresholds have moved as newer policies were written, and where yours sits
- What a declined partial claim means for the rest of the cover you hold
Why Trauma Sits Outside Super
We can explain why new trauma cover has to be held outside super, and what follows.
Since 1 July 2014, new insurance in super has had to align with a condition of release, such as death, terminal illness, permanent incapacity or temporary incapacity. Trauma pays on diagnosis whether or not you stop working, so new trauma cover can’t be held in super. Some policies written before then were grandfathered and may still be in force.
We’ll set out where your cover sits and why:
- The conditions of release that new insurance inside super has to align with
- Why a diagnosis you can recover from meets no condition of release
- An older trauma policy inside super, grandfathered and worth checking before you move it
- What happens to grandfathered trauma cover if the super account is closed or rolled over
- Premiums paid from after tax income rather than from a retirement balance
- How holding trauma outside super changes the way a payment is received
- Linking trauma to a life policy outside super, and what that arrangement costs
- Budgeting for a premium that has no super balance behind it, unlike life or TPD cover
How Much Trauma Cover You Need
We can size trauma cover against what a serious diagnosis may cost your household.
Trauma cover is often used to buy time. There’s no single figure that suits every household, so we consider out of pocket medical costs, housing and household payments that continue, any time a partner may take off work, and the period before any income protection payments start.
We’ll build the number with you from:
- Out of pocket medical costs that Medicare and any private health cover may not meet
- Housing and household payments that may continue through months of treatment
- Time a partner may take off work, and the income that could stop with it
- The waiting period on any income protection, and whether trauma cover could help bridge it
- Travel and accommodation where treatment is a long way from home
- Home help and childcare through a recovery that runs beyond a few weeks
- Any leave entitlement you could draw on first, which may reduce the figure needed
- A review of the number after a diagnosis in the family or a change in income
Reinstatement After a Claim
We’ll check whether your cover continues after a trauma benefit has been paid.
A full trauma claim generally ends that portion of the cover. Some policies offer a reinstatement or buy back option, which may restore the sum insured after a set period, subject to its conditions and exclusions. Whether your policy has one, and what it requires, is worth knowing before a claim.
The decisions we make together here:
- Whether your policy offers a reinstatement or buy back option at all
- The wait before reinstated cover starts, and whether a new qualifying period applies
- Conditions excluded from reinstated cover, which may include the one already claimed on
- The cost of adding reinstatement against the protection it restores
- What happens to a linked life policy once a trauma benefit is paid
- Whether the life cover is reduced, and whether a buy back restores that too
- Whether a buy back option extends to any TPD cover attached to the policy
- A fresh application after a claim, and what an insurer would ask about
Trauma Cover for Children
We can talk you through child trauma cover and whether it belongs in your plan.
Child trauma cover can pay a lump sum if a covered child is diagnosed with a listed condition and its definition is met. The money may help with a parent taking leave, travel to a specialist or help at home during treatment. It’s generally added to a parent’s policy, and cover ends at an age the policy sets.
Together we’ll look at:
- The conditions a child policy lists, which may differ from an adult condition list
- The age cover starts and the age it ends, which varies between policies
- Whether the cover is an option on a parent policy or a standalone one
- What a payment could help fund, such as leave from work, travel and help at home
- Cover for more than one child, and how the sum insured is applied
- Whether a policy converts to adult cover when a child reaches the end age
- How a child trauma payment received by a parent may be taxed, checked with your accountant
- How the premium sits against the rest of the household protection budget
Tax on Trauma Premiums and Benefits
We can explain the tax treatment of trauma premiums and of a trauma benefit.
Premiums on personally held trauma cover generally aren’t tax deductible, unlike income protection. The difference reflects the type of payment: income protection replaces income and is taxed as income, while a trauma benefit is a lump sum that’s generally tax free where the policy is held personally. Ownership affects the treatment, so we work with your accountant.
Here’s what we settle before anything is applied for:
- Why a personal trauma premium generally isn’t deductible while income protection premiums may be
- How a payment is treated when the policy is owned by you personally
- What may change if a company or trust owns the policy, with your accountant’s input
- Why trauma inside a business structure needs its purpose documented
- The interaction with a linked life policy owned in a different name
- What your accountant may need to see once a payment has been received
- Whether a payment affects any Centrelink entitlement you receive, and how to plan around it
- How the treatment changes if you later move the policy into a different name
Trauma Alongside Income Protection
We can help you structure trauma and income protection so one can help before the other starts.
Trauma and income protection meet different needs. Income protection can pay monthly while you can’t work, after a waiting period and subject to its definition. Trauma can pay a lump sum on the diagnosis of a listed condition, which may help in the first weeks with the waiting period, out of pocket costs and decisions that won’t wait.
You’ll end up with a clear position on:
- The waiting period on any income protection, and what could help cover the gap before it
- Whether a trauma payment affects income protection payments already running
- How the two are sized together so neither is carrying the whole job
- Which cover answers a diagnosis you recover from, and which answers a long absence
- The combined premium, and where the balance between them should sit
- Holding income protection inside super while trauma stays outside it
- What a return to work does to each cover, and when payments stop
- Whether the two are still balanced after a change in income or in health
Your Trauma Cover, Worked Through Together
The Conditions Your Policy Lists
Which illnesses are covered, and the severity a diagnosis has to reach.
A Sum Insured Built From Costs
The figure set against treatment, time away from work and the bills that continue.
Cover Held Outside Super
Where trauma has to sit, and what that means for how you pay for it.
Reinstatement After a Claim
Whether protection continues once a benefit is paid, and on what terms.
Trauma Cover for Children
Cover for a child, and whether it belongs alongside your own protection.
Premiums and Payments After Tax
How premiums and payments may be taxed, checked with your accountant where needed.
Trauma With Income Protection
How a lump sum could help before any monthly income protection payments begin.
Partial and Reduced Payments
What a policy releases for a less severe diagnosis, and at what proportion.
Proactive, Holistic, and Experienced Financial Planning
Recovering from something serious can take time, and that time can be expensive if you need to stop earning. Trauma cover can pay a lump sum on the diagnosis of a listed condition, and the money isn’t tied to a particular use, so it can go where the pressure is. We’ll help you consider what amount may suit your household, and explain in plain words what a policy would cover and what it wouldn’t, before you apply.
This is cover for the middle of something rather than the end of it. The aim is to ease some of the financial pressure during treatment and recovery: medical costs, time away from work, help at home, and fewer money decisions to make at a difficult time. We’ll help you size it against what your household may need during that period, and we’ll be there to help with a claim and review your cover as things change.
Every financial decision impacts the next
Your Financial Life Is Connected
Great advice starts with understanding the bigger picture. Every stage of life presents new opportunities and challenges, from buying property and changing careers to growing your family, planning for retirement and protecting what matters most. At Ryker, we help connect every piece of your financial world into one clear strategy.
Your
Wealth
- Property & Investing
- Career & Income
- Tax Strategy
- Insurance & Protecting Your Family
- Super & SMSF
- Wealth & Investments
- Life Events & Changes
- Business & Wealth
- Legacy & Future Wealth
- Retirement Planning
Frequently Asked Questions
We’re invested in your long-term success. What we do is personal, and we take it personally.
Your financial decisions connect, so we consider the parts of your financial life that are relevant to the advice you need:
- Property & Investing
- Career & Income
- Tax Strategy
- Insurance & Protecting Your Family
- Super & SMSF
- Wealth & Investments
- Life Events & Changes
- Business & Wealth
- Legacy & Future Wealth
- Retirement Planning
This is how we help you make decisions today with your longer-term goals in view.
Everybody’s situation is different, so we listen first, understand what matters to you and explain your options clearly before we make a recommendation.
Trauma insurance, also called critical illness cover, can pay a lump sum if you’re diagnosed with a condition your policy lists and its definition is met.
Payment doesn’t depend on whether you stop working or make a full recovery.
Lists commonly include certain cancers, heart attack and stroke, and many policies extend to conditions such as major organ transplant, kidney failure and severe burns. Each condition has its own definition, which may include a severity threshold, a survival period or other requirements, so the definitions matter as much as the length of the list.
Each policy carries its own list, and many include more than the three conditions usually named.
Certain cancers, heart attack and stroke are commonly listed. Depending on the policy, a list may also include major organ transplant, kidney failure, severe burns, multiple sclerosis, Parkinson’s disease, coma and loss of limbs or sight.
Each definition sets its own requirements. A cancer definition may depend on staging and spread, a heart attack definition may require measured markers, and a stroke definition may require a lasting impairment. We read the policy wording with you, not only the product summary.
From 1 July 2014, new insurance inside super has had to align with a condition of release, and trauma cover doesn’t.
The relevant conditions are death, terminal illness, permanent incapacity and temporary incapacity. Trauma pays on the diagnosis of a listed condition whether or not you stop working, and you may fully recover, so new trauma premiums are paid from your own money rather than a super balance.
Some policies written before then were grandfathered. If you hold one, it’s worth checking what it covers before you move or close the account it sits in.
A trauma policy doesn’t necessarily pay the full amount for every diagnosis, because many conditions carry a severity threshold.
An early stage cancer or a milder heart attack may qualify for a partial payment rather than the full sum insured, at a proportion the policy sets, or may not be covered at all.
A partial payment may reduce the cover left for a later claim, and some policies have a survival period before anything is payable. We go through the thresholds in your policy so you understand what it may pay before you need to claim.
Trauma can pay on the diagnosis of a listed condition, while income protection can pay if you’re unable to work.
Trauma pays a lump sum when the policy’s definition is met, whether or not you stop working. Income protection pays monthly while you meet its definition of disability, after a waiting period.
The two can work together. A trauma payment may help in the first weeks, before income protection payments start, with costs such as treatment, travel or a partner reducing their hours. Income protection can then help with the months that follow, subject to its terms.
Premiums on personally held trauma cover generally aren’t tax deductible, and the reason helps explain the rest of the tax treatment.
Income protection replaces income, so its premiums are generally deductible and its payments are taxed as income. Trauma pays a lump sum, so the premium isn’t deductible and a payment on a personally held policy is generally received tax free.
Ownership can change the answer, and cover held through a company or trust needs separate consideration. We consider the structure before you apply and work with your accountant on the tax treatment.
Comparing online can show you prices and the number of conditions listed, but it may not show how each condition is defined.
Two policies can both list cancer and set the threshold differently, and the same applies to heart attack, stroke and other conditions. Severity wording, partial payment proportions, survival periods and reinstatement options may not appear in a comparison table, and the features shown vary between sites.
We read the definitions against your family history and circumstances, then consider which cover may suit you.
Your accountant and financial adviser bring different expertise to the same decisions. Your accountant can advise on tax reporting, structures and consequences; we help you plan how cashflow, debt, super, investments and protection work towards your goals. We can coordinate before important decisions.
What an accountant does
- Prepares and lodges tax returns, BAS and financial statements
- Advises on tax structures such as companies, trusts and partnerships
- Manages bookkeeping, payroll and ATO compliance
- Provides tax advice on the consequences of a transaction
What a financial adviser does
- Sets a long term strategy across retirement, investing and cash flow
- Builds wealth from early in a working life, starting with cash flow, a first home and super
- Recommends specific super funds, investments and personal insurance
- Operates under an Australian Financial Services Licence, which is required to give personal advice on financial products
- Handles retirement planning, Centrelink and aged care strategy, and estate planning considerations
Professional roles and authorisations matter. We provide financial advice within our authorisations and work with your accountant for specialist tax advice and lodgements.
Where they work together
- Tax position. Your accountant confirms your marginal rate, deductions and carried forward losses, which shapes decisions on super contributions, investment structures and the timing of asset sales.
- Business and entity structures. Your accountant advises on the structure itself and your financial adviser works within it for investments, insurance and succession planning.
- Cash flow. Your accountant’s figures can help us understand what’s available for debt repayment, protection and longer-term goals.
- Before key decisions. We can coordinate with your accountant on contributions, asset sales and other material choices in time to consider relevant tax consequences.
Very much so. Trauma cover is worth understanding before you buy it, because the wording shapes what it pays.
There’s no cost for the initial conversation. Tell us who depends on your income and what cover you already hold. We’ll explain what trauma cover does, how it fits alongside other cover and what we’ll need to get started.
You may decide trauma cover isn’t a priority right now, and that’s a reasonable decision to reach with the full picture.
Who We Help
Advice for All Stages of Life
From first job to retirement, we help you build wealth, protect it, and live well.
Starting Out
First jobs, first home, first super, HECS debt, budgeting and more.
Growing Families
First home buyers, new parents, school fees, single incomes, young families and more.
Medical & Health
Doctors, dentists, pharmacists, allied health, nurses and more.
Professional Services & Tech
Lawyers, accountants, brokers, engineers, consultants and more.
Trades & Business Owners
Electricians, plumbers, builders, sole traders, franchisees and more.
Corporate & Executive
Executives, senior managers, directors, board members and more.
Public Sector & Defence
Police, firefighters, paramedics, ADF personnel, teachers and more.
Approaching Retirement
Pre-retirees, transition to retirement, Age Pension, aged care, estate planning and more.
Other Stages
Any income, any stage, career changers, separation, second opinions and more.
Reviews
Testimonials from Our Clients
Grow & Protect Your Wealth Today
Whatever’s on your mind, we’re here to help. You’ll speak with an authorised financial adviser who’ll listen first and get to know what matters to you.
Book An Initial Conversation