“I’ve Got Insurance in My Super, Isn’t That Enough?” Why Trauma Cover Matters
Many people I speak with assume the insurance inside their super fund has them covered. Most funds do include a default mix of life insurance, TPD (total and permanent disability), and sometimes income protection. It sounds comprehensive on paper, until life throws something at you that those policies were never designed to catch.
What your super doesn’t include is trauma cover (also called critical illness cover). That one missing piece can change everything when life takes an unexpected turn.
Below are two recent stories with very different outcomes, and the difference came down to their insurance cover.
Story 1: With Trauma Cover
Recently, one of my clients was diagnosed with testicular cancer. Fortunately, he had reviewed his insurance cover with us, and we put adequate protection in place for him, including trauma cover. That decision changed everything for his future. When the diagnosis came through, a lump sum was paid immediately, and the tone of every conversation shifted.
The uncertainty of “What do we do about work? What happens to the mortgage and school fees?” quietened. Instead of piling onto the shock of the diagnosis, the financial pressure eased.
Their life didn’t have to be turned upside down because of an unexpected event. He could focus on recovery without the weight of having to keep financially providing or worrying that their future would be derailed.
While there were still tough days, it meant money wasn’t adding to the stress. The insurance cover didn’t make the diagnosis easier; it made the path through it calmer. It gave them choices: access to treatment, space to focus on recovery and the ability to take pressure off his family without constant money worries.
Story 2: Without Trauma Cover
On the other hand, a different call told a different story. An accountant friend of mine called about one of his clients who’d been diagnosed with stage 4 cancer. Unlike the first family, he had only the default cover inside his super: life insurance, TPD and income protection. Trauma cover, which typically pays a lump sum on diagnosis with a specified serious illness or injury, wasn’t in place, so there was no immediate payout to ease the financial burden.
He was faced with the uncertainty of “How do we manage without my full income? What about the mortgage and bills? How long until I can return to work?”
Without that upfront financial support provided by trauma cover, there was no peace of mind during that time.
He’d done what many do and relied on the default insurance, assuming it was enough. Without trauma cover, he faced treatment and uncertainty with limited financial support at the very moment stability mattered most.
The Risk of Relying on Super Insurance:
It’s a common assumption that the insurance within your super fund will take care of everything. However, default super insurance is designed as a safety net, not a complete protection plan. That gap can leave families financially exposed when they need the support most.
Underinsurance often goes unnoticed. You think you’re covered, until you realise you’re not, and by then it’s too late. Default cover inside super isn’t tailored to your income, debts or family needs; it’s built around averages. That’s why it so often falls short when life delivers the unexpected.
The “It won’t happen to me” Mindset:
One of the biggest reasons people don’t take out additional insurance cover is because they can’t imagine needing it. Paying for something you hope never to use can feel unnecessary. But serious illness and injury don’t discriminate by age, postcode, or profession.
The statistics are confronting:
1 in 6 Australians will have a stroke in their lifetime*
1 in 3 men will be diagnosed with cancer before the age of 75*
25% of women are diagnosed with cancer before the age of 75*
These aren’t rare scenarios; they happen every day to ordinary families. And when they do, the shock isn’t only emotional or medical, it’s financial.
When faced by one of these diagnoses, the last thing you should have to think about is how to keep up with mortgage repayments, school fees, or treatment costs. The appropriate cover takes the uncertainty away, turning “How will we manage?” into “We’ve got this.”
The Importance of Trauma Cover:
Trauma cover provides a lump sum if you are diagnosed with a serious medical condition such as cancer, heart attack, or stroke.
Here’s how it’s different from other types of cover:
Life cover: you have to pass away to claim.
TPD: you need to be permanently unable to work.
income protection: ongoing proof-of-income loss is required.
The trauma cover benefit is paid at diagnosis, giving you immediate flexibility to:
Pay for treatments or surgeries not fully covered by Medicare or private health
insurance
Replace lost income if you or your partner takes time off work
Clear or reduce debt to lower financial stress
Fund lifestyle changes, such as reduced hours or more family support
Protect long-term plans like children’s education, without derailing them
In Summary:
The insurance inside your super is a good foundation, but it often leaves a gap. It’s built to provide a basic safety net, not to fully protect your lifestyle, your family, or your peace of mind when the unexpected happens. Serious illness doesn’t just affect health; it impacts income, routine, and security.
That’s where trauma cover makes the difference. It gives you options, letting you focus on recovery and family instead of finances. It’s the cover that steps in when life changes suddenly, helping you stay steady when everything else feels uncertain.
If it’s been a while since you’ve reviewed your insurance, now’s the time. Making sure your cover truly fits your life today can make all the difference tomorrow.
*Statistics from the Australian Bureau of Statistics & Australian Government, Australian Institute of Health & Welfare
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About the Author
John Cachia is a seasoned financial adviser and dedicated parent of three boys. With a passion for financial literacy and wealth management, John has been in the industry since the young age of 14. His early start in finance has provided him with a wealth of experience and insight, which he now uses to guide families towards achieving their financial goals. As Australia's leading wealth adviser for young families, John is committed to helping parents become positive financial role models for their children, ensuring a secure and prosperous future for the next generation.
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