What is the difference between trauma cover and critical illness cover?

Trauma insurance and critical illness insurance are actually the same product with different names used interchangeably in Australia. Both terms refer to insurance that pays a lump sum benefit if you're diagnosed with a specified serious medical condition covered by your policy. The term 'critical illness insurance' is more commonly used internationally, particularly in the United Kingdom and other countries, while 'trauma insurance' has become the preferred term in Australia and New Zealand. Some Australian insurers may also call it 'recovery insurance' to emphasize its purpose in helping you recover from serious illness. Regardless of which name is used, the insurance functions identically: you receive a tax-free lump sum payment upon diagnosis of a covered condition such as cancer, heart attack, stroke, or major organ failure, provided you meet the policy's medical definition and survive the required survival period. The coverage typically includes 30-60 specified conditions, payments are made as lump sums rather than ongoing benefits, you can use the money for any purpose, and premiums are not tax-deductible but benefits are tax-free. When researching or comparing policies, you may encounter all three terms (trauma insurance, critical illness insurance, and recovery insurance), but they refer to the same insurance product. What matters most is not the name but the specific conditions covered, medical definitions used, policy features, exclusions, and premium costs, which can vary significantly between insurers even when using the same terminology. Always read the Product Disclosure Statement to understand exactly what you're purchasing.