What is critical illness insurance?

Critical illness insurance – also known as trauma cover – is an optional add-on to life insurance. It pays a lump sum if you get diagnosed with one of 50 serious medical conditions, such as cancer or a heart attack.

How much does critical illness insurance cost?

Finder research has found that critical illness could range from around $75-$115 per month, based on a 35-year-old male (non-smoker) living in NSW. For customised pricing, get a live quote on Finder's quote engine.

Am I eligible for critical illness insurance?

If you are aged between 16 and 65 you are able to apply for critical illness insurance. Each insurer will ask their own questions to assess your eligibility. You'll be asked about your health, lifestyle and your family's medical history and you may or may not have to undergo a medical test yourself.

How much will my benefit amount be?

It depends on the terms you agree on signing up for cover. Keep in mind that many critical illness policies will include an automatic increase in the benefit amount each year, to keep in line with inflation.

What is a critical illness exclusion period?

A critical illness exclusion period, also referred to as a qualifying or waiting period by some brands, is a time frame during which claims will not be paid. The period can begin from: The start of your policy The date you apply for an increase in coverage The most recent state that the policy was reinstated An exclusion period is usually 3 months (90 days) but it can be as high as 6 months for some conditions. As an example, most types of heart surgery or stroke have a 3-month exclusion period, whereas forms of malignant cancer can have a 6-month exclusion period.

What are some of the exclusions?

Instances where benefits may not be paid include: A claim being made within the 3–6-month exclusion period An injury that is self-inflicted or the result of attempted suicide If the sickness or injury started or was diagnosed before the insurance was purchased Illnesses that do not qualify for benefits. Check your policy for a full list of covered illnesses

What is not included in critical illness insurance?

Your claim may not be eligible for payment is certain circumstances, for example if the condition is a result of a self inflicted injury, or if you have not applied for the cover personally, or an application is made on behalf of another person.

Are there any restrictions on what I can use my insurance payout for?

No. You can use it on whatever you need: whether that's to pay out your mortgage, meet the cost of medical expenses, or for anything else.

Why might my claim not be accepted by an insurer?

The core reasons for less illness claims not being paid out include: Pre-existing medical conditions Many policies will not cover illnesses that arise from pre-existing medical conditions. The exact illness is not covered. Most critical illness policies will have a set list of what conditions are covered. Make sure you check your product disclosure statement (PDS). Non-disclosure. Your claim can be declined if you fail disclose a pre-existing medical condition.

Is critical illness insurance tax deductible?

Premiums paid for the insurance are not tax-deductible, however the benefits paid from a claim are tax-free. The reason for this is that in comparison to something like income protection insurance which replaces income, critical illness insurance pays out a lump sum and is therefore exempt from capital gains tax.

Home Authors James Martin

James Martin

Journalist

An experienced journalist, James Martin has written on a range of insurance and finance topics for over 7 years. He is a trusted source of insurance insights and has shared his expertise widely as a media spokesperson for Prime 7 News, Insurance News, 7NEWS, and The Guardian, providing commentary on the latest developments in insurance. James’ work has been featured in prominent publications including The Irish Times, Companies100, and In Business, where he contributed in-depth analysis and coverage of various insurance and financial topics. His career spans a range of roles, from news journalist at The Irish Post to Communications Manager at Business Connectors, and Content Writer for Compare the Market UK, where he focused on insurance, credit cards, and mortgages. He holds a Bachelor of Arts in English Literature from the University of Westminster, as well as a Tier 1 General Insurance (General Advice) certification and a Tier 1 Generic Knowledge certification, both of which meet the requirements of ASIC Regulatory Guide 146 (RG146), ensuring that he is fully compliant with Australian financial services regulations. James was a Senior Insurance Writer, then Insurance Editor at Finder from 2019 to 2024.

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Tier 1 General Insurance (General Advice) certification
Annual Finder Innovation Awards judge for Insurance and Insurtech

Education

Bachelor of Arts (Honours): English Literature | University of Westminster | 2007-2010
National Council for the Training of Journalists (NCTJ) | Sub-editing and Production Journalism | Brighton Journalist Works | 2012

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Life Insurance

Critical Illness Insurance

Get cover for up to 50 serious medical conditions with critical illness insurance, which can be bought as a standalone policy or added on to life cover.

James Martin 26 November 2024

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