Trauma insurance, also known as critical illness or recovery insurance, pays a tax-free lump sum if you're diagnosed with a specified critical illness or suffer a serious injury covered by your policy. Unlike life insurance which pays on death, or TPD which requires permanent disability, trauma insurance pays out when you meet the medical definition of a covered condition - even if you can still work. The lump sum can be used for any purpose including medical costs, mortgage repayments, living expenses, modifications to your home, or taking time off work to recover. Most policies cover 30-60 conditions including cancer, heart attack, stroke, major organ transplant, and coronary artery bypass surgery. The payment is typically made after you survive a specified period (usually 14 days) following diagnosis and provide medical evidence confirming the condition meets the policy definition.