Why do I need both TPD and trauma insurance?

Trauma insurance pays a lump sum if you suffer from a specific, major illness or injury, such as cancer, a heart attack or the loss of a limb. Your policy will cover a defined list of medical conditions and will probably exclude anything you have suffered from in the past.

Although most major illnesses will be covered by any trauma policy, there are subtle differences in the definitions of each medical event and in the benefits they offer. Your risks will be different depending on your age, gender, health, lifestyle and occupation so when choosing a policy, you need to know exactly what is covered. Our advisors can help you compare policies and understand how much cover each product provides for different conditions.

If you do experience a trauma event you can make a claim on your insurance even if you are still able to work. You can use the money for any purpose – to cover medical costs, pay your living expenses or pay off debts.

TPD cover also pays a lump sum if you suffer a major illness or injury – but only if you are permanently no longer able to work, or in some cases if you can no longer perform the normal activities of daily life. You can choose whether to insure against being unable to do the work you do now (‘own occupation' cover) or against not being able to work again in any capacity. Own occupation cover will usually be more expensive, especially if your job involves physical labour.

If you are medically unable to work you can make a claim on your TPD cover regardless of the cause of your disability, unlike trauma cover which will only pay for specific illnesses.

In many cases a condition would be covered by both trauma and TPD policies. For this reason, it can be cost effective to buy an insurance package where your TPD cover provides a ‘catch all' for anything not covered in your trauma insurance.