Trauma cover vs. health insurance: what’s the difference?

On the surface, trauma insurance and medical insurance might sound like they tick the same boxes, but in reality, they are quite different—and each one is critical to providing care and financial assistance when you fall ill.

Health insurance: the big ticket items covered

While some health insurance policies provide day-to-day cover (for example, GP, dental and optical), that is not where the real benefits lie. The best health insurance policies are those that cover you when you need it most—that is, when you need major medical intervention. 

Medical costs are expensive, particularly the big ticket items such as hospital stays, surgery, specialist appointments and diagnostic tests. When your health takes a serious turn, these types of bills can quickly get out of hand. This is where health insurance steps in, and it is why we always recommend choosing a policy that includes major medical cover. Bear in mind, every policy is different, so it is important to check your policy will meet your needs.

Why should you have it?

• Access to immediate treatment. Health insurance gives you access to private health care, often with minimal wait times.
• Better treatment options. Some health policies provide access to non-Pharmac drugs, many of which are crucial for treating certain cancers and medical conditions and are not covered by the public health system. Important note: Not all medical insurances cover this, so it is vital to check!

Trauma cover: covers the costly extras

Trauma insurance caters for scenarios when you need funds to pay for treatments that health insurance doesn’t cover. 

Trauma cover is a one-off payment. It covers a range of major medical events such as stroke, a cancer diagnosis, heart attack and life-threatening injury (e.g. severe car accident). Trauma cover is designed for situations where despite the cost savings health insurance provides, it is still is not enough. Think cancer treatment in the long term. Initially, you might cover the subsidised costs yourself after your diagnosis, but as the illness goes on, your finances may get stretched, even with your health insurance chipping in.

Trauma can also provide funds for treatment or surgery not covered by your health insurance.

Why should you have it?

• Cash injection. Trauma cover is a lump sum payment. Having that extra cash in the bank gives you the freedom to recover from your trauma and plan your future
• Flexibility. You can choose how you want to use the funds, whether it helps pay for cancer treatment, rehab or home modifications. It’s up to you.
• Ease financial pressure. Can take the pressure off your finances if you suddenly find yourself unable to work for an extended period.

It pays to have both

While there is some overlap in health and trauma cover, it is critical to understand the differences between them and how they could apply to you. Having trauma sit alongside your health insurance provides an extra safety net to cover major lifestyle changes and lifesaving treatments that otherwise might be out of reach.

Most of all, having both gives you options. You’re not locked into the public health system or trying to cover the cost of your health care out of your own pocket.