What trauma insurance costs

Trauma cover — also sold as critical illness or living assurance — pays a lump sum when you are diagnosed with one of the conditions listed in the policy and survive a short stand-down period. Cancer, heart attack and stroke account for the great majority of claims in this market.

The price reflects probability. Life insurance pays if you die; trauma pays if you are diagnosed. Between now and 65 the second event is considerably more likely than the first, so trauma cover for the same sum insured is materially more expensive than life cover — at every age, and increasingly so as you get older.

We do not publish a trauma premium table. There is no current, reliable New Zealand source for it that we would be willing to quote, and an estimate dressed up as data would be worse than no number at all.

The last row of that table deserves attention. Trauma is where an existing health history most often produces an exclusion rather than a loading — a family history of a particular cancer, for example, can result in that condition being carved out. Which insurer does that, and which does not, varies enough to be worth shopping.

These are the details that decide whether the cover does what you expected. Read them before you compare on price.

• Whether the quote is standalone or accelerated, because they are not comparable on price.
• How the common conditions are defined, particularly the carve-outs for early-stage cancers.
• Whether partial benefits are paid for less severe conditions, and whether they reduce the full sum insured.
• Whether there is a buy-back option to reinstate life cover after an accelerated claim.
• Whether the premium is stepped, and what the modelled cost looks like at 55 and 60.
• Any initial exclusion period — cancer and heart conditions are often not covered in the first three months.

Every New Zealand insurer writes what life insurance costs in nz to its own wording, and the words are where the money is. Two policies that look identical on price can pay very differently when it matters. Closing that gap is the entire job of an adviser.

• Condition lists look similar in marketing and differ materially in wording. Comparing them properly is the core of the job.
• Trauma is the cover where insurer appetite for a health history diverges most, so the same person can be offered very different terms.
• Splitting cover between accelerated and standalone can produce a workable premium without losing the life cover underneath.
• Severity-based and traditional products are hard to compare on price alone, and the comparison needs someone who reads the schedules.

There are three ways to buy life cover in New Zealand, and they are not equivalent. You can buy direct from one insurer, which means you see one product range and one underwriting appetite. You can buy through your bank, which usually means a single insurer’s product sold under the bank’s brand, often with narrower definitions. Or you can go through an adviser, who quotes several insurers at once and is required to put your interests first.

The premium you pay is the same either way. Insurers build adviser commission into their pricing whether or not an adviser is involved, so going direct does not get you a discount — it just removes the person whose job is to argue your corner at application and at claim time.

• An adviser can see which insurer is currently taking your health history on standard terms, and which one will load or exclude it.
• An adviser can structure cover across two insurers if that produces a better outcome than putting everything with one.
• An adviser handles the underwriting back-and-forth, and is the person who chases the claim when a family is least able to.
• An adviser has to document why the recommendation suits you, which is a written record you can hold them to.

We are a referral service, not an insurer. We do not quote premiums and we do not sell policies. What we do is put you in front of one licensed New Zealand adviser who can compare the market properly.

1. 1

   You tell us what you are looking at

   The form takes about a minute. Nobody asks for your medical history on a web form — that conversation happens with the adviser, properly, and only once you have decided to proceed.

2. 2

   An adviser calls you

   A licensed New Zealand adviser talks through your situation: who depends on you, what you owe, what you already have in place, and what you are actually worried about.

3. 3

   They compare the market

   The adviser quotes across the major insurers, checks which of them will take your health history on the best terms, and puts the options side by side in writing.

4. 4

   You decide, in your own time

   There is no obligation and no cost to you. If the answer is that you already have enough cover, a good adviser will tell you that.