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21 Jun 2022

Health and trauma insurance: Do you know the difference?

You have probably heard of health insurance, and you might have heard a bit about trauma insurance, too.  At first, you might wonder what the difference is. They're both there to help if you get sick, right? The short answer is yes. But the two types of cover act in really different ways and, depending on your needs, it can be beneficial to have both in your protection portfolio. First, what is health cover, and how is that different from trauma?

Health cover

While New Zealand has a solid public health system, it is often not particularly quick to treat conditions that are not acute or life-threatening. 

Health insurance is there to pick up the bill for treatments that you have in the private system. If you don't have enough space in your budget to build up a significant emergency fund specifically to pay for healthcare bills, insurance can be a really useful tool.

It can be used when you want to go to a private specialist for a condition, or do not want to wait as long on the public waiting list for surgery.

A growing number of New Zealanders have been taking out health insurance in recent years because it often enables them to get health conditions treated more quickly and to get (hopefully) back to normal life.

Trauma insurance

Trauma insurance, on the other hand, pays you a lump sum that you can use for whatever you like, if you are diagnosed with one of the specified critical health conditions. These are usually things like certain cancers, a stroke, loss of a limb or a terminal illness. Your policy wording will explain the conditions on which you can claim (and you can always ask us, if you have any questions)

You can choose the level of cover you want to have in place, to be paid out if you are diagnosed with one of these conditions. You can then use the money to pay for anything you need, including things like your mortgage, treatments that are not funded by the public system or your health insurer if you have one, or providing a replacement income to enable you to have time off work to spend with your family.


As you can see, the two types of insurance will react quite differently, even if you suffer a condition that they both cover.

You might use health insurance to cover the cost of your surgery, then use your trauma insurance to ensure you can afford to take some time off work to adequately recover, or to set up a fund to ensure your kids' financial futures are catered for. The choice is up to you.

Like to talk?

If you’d like to reduce the financial impact of a serious health issue, a combination of trauma and health insurance could be a good idea. Get in touch: we can help you appraise what’s available and find a suitable solution for your needs.



Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.

Link Financial Group Ltd trading as Mortgage Link and Insurance Link FSP 696731 holds a licence issued by the Financial Markets Authority to provide financial advice. Insurance Link (NZ) FSP 446867 is authorised by that licence to provide financial advice. Please visit for more information and Disclosure information.