Trauma Insurance Calculator
Trauma insurance pays a tax-free lump sum when you are diagnosed with a serious medical condition, so you can focus on recovery instead of bills. This trauma insurance calculator builds your recommended cover from your debts, income needs, treatment costs, and existing protection, then shows the gap you still need to fill.
Quick Answer
Your trauma cover need is debts + (income × years off work) + treatment buffer − savings − existing cover. For $250,000 of debts, $100,000 of income to replace for 5 years, and a $50,000 treatment buffer, the total need is $800,000; with $60,000 in savings and $200,000 of existing cover, you need $540,000 more.
- Trauma cover is a lump sum, not income. It pays once on diagnosis so you can clear debts and fund treatment without working.
- Build cover from needs, not rules of thumb. Debts plus income replacement plus treatment costs, minus what you already have.
- Most Australians buy under $1M. Compare data shows most policies sit below $1 million, though $1-2M+ is growing as debts and treatment costs rise.
- Review cover as life changes. A new mortgage, a new child, or a pay rise all change the number: recompute yearly.
How the trauma cover formula works
Mortgage, car loans, credit cards: the balances a lump sum should erase.
Annual income × years you might be off work recovering (often 2-5).
Out-of-pocket costs, rehab, home changes, a partner's lost income.
Savings, investments, and existing trauma cover reduce the new cover needed.
What trauma insurance actually pays for
Typical covered conditions include heart attack, stroke, and cancer diagnoses, with payouts ranging from $100,000 to the full insured amount depending on severity. The money is yours to use however recovery demands: clearing the mortgage, paying for treatment Medicare does not cover, or simply keeping the household running. If you are weighing this against broader protection, our permanent life insurance calculator sizes the death-benefit side, and our VA disability calculator covers service-connected benefits. A mortgage you want the cover to clear can be modeled in our mortgage payment calculator.
The cover bands: where most people land
Clears smaller debts and funds a short recovery. Often enough for renters with modest loans.
The sweet spot for most mortgage holders: clears a typical loan plus 2-3 years of income.
Growing fast as Sydney and Melbourne mortgages rise. Covers large debts plus long recovery windows.
Trauma vs life insurance: do you need both?
- Pays on diagnosis of a listed condition
- You receive the money while alive
- Funds treatment and lifestyle through recovery
- Cover amounts typically $100k-$2M
- Pays on death or terminal illness
- Your family receives the money
- Replaces lifetime income for dependents
- Cover amounts typically $500k-$2M+
They answer different questions: trauma protects you during recovery; life insurance protects your family after you. Most advisers treat them as complementary, not alternatives.
What other trauma calculators get wrong
Several competing "trauma insurance calculators" are quote funnels: they ask for your age and a cover amount and return premiums without ever computing whether the amount is right. Others are general life-cover tools relabeled, ignoring the treatment buffer that is trauma's whole point. A needs-based estimate built from debts, income, treatment costs, and existing cover, as this calculator does, is the only approach that answers the actual question: how much do I need.
Frequently Asked Questions
Add your debts, the income you would need to replace during recovery, and a treatment buffer, then subtract savings and existing cover. For many mortgage holders this lands between $500k and $1M.
A tax-free lump sum paid on diagnosis of specified serious conditions such as heart attack, stroke, and cancer. You can spend it on anything: debts, treatment, or living costs.
Up to $2 million. Most Australians hold under $1 million, but $1-2M+ policies are growing as debts rise.
Trauma lump sums paid to the policy owner are generally received tax-free in Australia.
They complement each other: income protection replaces monthly income, while trauma pays a lump sum that clears debts and funds treatment costs income protection never touches.
Trauma insurance is generally not available inside superannuation in Australia, unlike life and TPD cover. It is usually held as a standalone or bundled retail policy.
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References
- Compare Club. Choosing Your Trauma Cover Amount (needs-based sizing, $2M max, band data). Accessed October 17, 2026.
- iCompare. Trauma Insurance Calculator: How Much Lump Sum Should I Get?. Accessed October 17, 2026.
- Moneysmart (Australian Government). Choosing Life Cover (ASIC guidance on sizing personal cover). Accessed October 17, 2026.
- Finder Australia. How Much Trauma Insurance Do I Need?. Accessed October 17, 2026.
- Savii Insurance. Trauma Insurance (covered conditions and benefit examples). Accessed October 17, 2026.
- Mozo. Trauma Insurance. Accessed October 17, 2026.