Severity-based trauma cover

A traditional trauma policy is binary. Either the diagnosis meets the definition and 100% of the sum insured is paid, or it does not and nothing is. That works cleanly for advanced disease and badly for the growing number of conditions caught early, where treatment is disruptive and expensive but the diagnosis fails a definition written for later-stage illness.

Severity-based cover addresses that by grading payment. An early-stage tumour might pay 10% or 25% of the sum insured; the same cancer at a more advanced stage pays 100%. Angioplasty on a single vessel might pay a partial benefit where full coronary artery surgery pays in full.

The result is a product that pays more often and, in some cases, pays less. Whether that is better depends on what you are insuring against. If the fear is a catastrophic illness that ends your working life, a full-payment policy with strong definitions may serve you better. If the fear is the disruption of a serious diagnosis at any stage, severity-based cover responds in more of those situations.

1. 1The diagnosis is assessed against the policy’s severity schedule rather than a single definition.
2. 2A percentage of the sum insured is paid according to the tier the diagnosis falls in.
3. 3The sum insured usually reduces by the amount paid, and the policy continues on the balance.
4. 4Premiums typically reduce in proportion to the reduced sum insured, though this differs by insurer.
5. 5If the condition later progresses to a tier that would have paid in full, most products pay the difference.
6. 6Some insurers reinstate the full sum insured after a period if the partial payment was small.

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

• Whether a partial payment reduces the sum insured permanently or is reinstated after a period.
• Whether the policy pays the balance if the condition progresses to a higher tier.
• Whether partial payments are capped in dollar terms as well as by percentage.
• Whether the premium reduces after a partial claim, and by how much.
• How many partial claims can be made, and whether they must be for unrelated conditions.
• Whether the severity schedule is guaranteed for the life of the policy or can be revised.

Every New Zealand insurer writes trauma insurance in new zealand 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.

• Severity schedules are proprietary and differ substantially — this is the hardest part of the market to compare without access to full wordings.
• For a person with a family history of a specific condition, one insurer’s schedule may be markedly more generous on that condition than another’s.
• An adviser can map a hypothetical diagnosis across several products, which is the only meaningful comparison.
• Where budget is limited, understanding whether you are buying breadth of payment or depth of payment is a decision worth making deliberately.

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.