Trauma Insurance versus TPD Insurance

Trauma insurance and TPD insurance seem similar, but there are differences. Understand how they compare and which is right for you.
trauma insurance versus TPD insurance

Claiming TPD benefits for a Fibromyalgia Mental Illness

Guide to TPD Insurance and Trauma Insurance Comparison

Trauma Insurance versus TPD Insurance

A range of insurances provides protection when you become injured or ill, including income protection insurance, trauma or critical illness insurance and total and permanent disability (TPD) insurance. Each insurance offers coverage for different circumstances when the unexpected happens. It is common for people to be confused when reviewing these insurance policies as they can seem related and provide similar benefits. This blog seeks to remove some uncertainty by outlining the difference between trauma insurance and TPD insurance.

Understanding Illness and Injury Insurances

Most working Aussies have insurance policies routinely given to them when they start contributing to their superannuation. These policies include life insurance, income protection insurance and TPD disability coverage. In Australia, your employer must contribute to your superannuation account, and your super fund pays your insurance premiums.

Typically, people rarely consider their mandatory insurance coverage until something goes wrong and they struggle with living expenses. When this happens, they are unsure if they already have financial protection.

Types of Financial Protection Insurance

If you’ve been injured and need help paying for your recovery, there are two types of insurance that you could provide protection. One covers you against financial losses from an accident; the other includes compensation for lost income while recovering. These are called Trauma Insurance and Total Permanency Disability Insurance (TPD). They’re often confused, but they serve very different purposes.

When you have been severely injured or become ill, you must take the time to focus on your recovery rather than worrying about your financial position. In this case, trauma insurance can help.

Trauma Insurance Cover - What is it?

A trauma insurance policy (or critical illness policy) pays out a lump sum if you’re seriously injured or have acquired a significant medical condition. You don’t need to make regular claims under a critical illness policy – it’ll pay out once you meet the requirements contained within your policy.

A Trauma policy pays out a lump sum if you’re seriously injured or critically sick. Your medical condition needs to meet the list of ailments contained within your critical illness policy. You don’t need to make regular claims under a critical illness policy – it’ll pay out once you meet the conditions required for coverage

More about trauma insurance >

How does TPD (Total and Permanent Disability) Insurance work?

If you become physically injured or ill or acquire a psychological condition and cannot work in your usual occupation, you could claim a lump sum TPD payout. For the requirements of permanent disability insurance, how you became ill or injured is of no consequence. No predefined list of conditions qualifies you as having a total and permanent disability, but some ailments are more common.

Mental health TPD claims are more common than physical injury, and common psychological issues include PTSD, bipolar disorder, schizophrenia and severe anxiety and depression. Common illnesses for successful disability claims include primary health conditions like diabetes, heart attack, strokes, Alzheimer’s disease and cancer. A broad range of physical injuries could stop you from working, including loss of a limb, paralysis, and reduced sight or hearing.

It may seem that to qualify as having a disability, something significant needs to go wrong in your life. This is not always the case. To know where you stand, speak with one of our experienced insurance claim lawyers. It’s free to know if you can make a claim.

More about TPD insurance >

How does Critical Illness (Trauma) Insurance work?

Unlike TPD insurance, you cannot access trauma coverage through your superannuation.

You must purchase trauma insurance or a critical illness policy via an insurance broker or financial advisor. Occasionally your employer or union membership will provide recovery insurance as part of a package.

How do I get a Trauma Insurance Payout?

How and when you receive a trauma insurance payout is determined by the conditions of your policy. There will be a list of predefined conditions within your insurance, which will likely be a long list. Some common medical circumstances include:

To understand if you qualify for a payout, you should seek legal assistance with meeting the terms and conditions of your policy.

Can I have a TPD Claim and Trauma Insurance Claim?

The simple answer is yes, you can. A medical situation that qualifies for a trauma insurance payout is highly likely also to meet the conditions for a TPD disability payout. If you have paid funds into more than one superannuation account during your lifetime, you could also have more than one Total and Permanent Disability claim. To understand more about how many lump sum payments you could receive and how much they might be worth, speak with one of Aussie’s friendly legal team now.

Understanding the T&Cs of your Trauma Insurance

Your critical illness or trauma insurance will contain a list of medical definitions. It is typical for each of these to have a qualifying condition. For example, you might need to meet or exceed a severity level of illness, require your situation to be permanent, or have to be reassessed after a period.

Insurance companies don’t enjoy paying out lump sum benefits. It is usual for them to try and minimise or deny your case. Aussie Injury Lawyers have years of experience dealing with insurers and their techniques for denying your entitlements. Rely on our 99% claim success rate and choose Aussie for your case.


Trauma insurance and TPD insurance are both types of insurance, but they provide different types of protection for when life goes wrong. If you’re unsure which type of policy can assist your financial situation, or if you have any other questions about the differences between critical illness insurance and TPD insurance, contact our legal team now. The friendly team at Aussie Injury Lawyers can help you understand your legal options and how to access all your insurance benefits.



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