Combining life insurance with critical illness cover
Life insurance pays a lump sum on death, and critical illness cover, called trauma cover in New Zealand, pays a lump sum when you are diagnosed with a condition the policy lists, such as cancer, heart attack or stroke. You can add trauma to life cover as an accelerated benefit, where a trauma payout reduces your life cover, or buy it standalone, where it does not. Momentum's Quick Life pays on death and terminal illness only. It has no critical illness benefit.
In short
- Fidelity Life describes both structures: standalone cover "won't affect the total amount covered by your Life cover", and an accelerated payout is deducted from your total life cover (Fidelity Life).
- Trauma pays only listed conditions. IFSO says it "will only cover certain specified life-threatening health conditions", and that declined claims because of exclusions are a common complaint (IFSO).
- Quick Life's terminal illness benefit is not critical illness cover. It pays when death is expected within 12 months.
- Trauma cost climbs steeply with age. For a man at 60, the Premium Index range for $100,000 of trauma cover is the same as the range for $500,000 of life cover.
Three different payouts
| Cover | Pays when | Pays |
|---|---|---|
| Life insurance | The person dies (or is terminally ill, if the policy includes that) | A lump sum |
| Critical illness (trauma) | Diagnosis of a defined serious condition | A lump sum |
| Income protection | You cannot work because of illness or injury | A monthly benefit towards replacement income |
The definitions follow Fidelity Life's: trauma "provides a lump sum payment if the life insured suffers from a defined serious illness or condition", and income protection pays a monthly benefit when you cannot work (Fidelity Life underwriting guide). ACC covers injury, not illness (ACC), so a serious illness has no ACC payment behind it. For how the three compare in detail, see income protection versus trauma and the critical illness guide.
Accelerated or standalone
Fidelity Life's trauma page sets out the structural difference, and the same choice exists elsewhere in the market.
- Standalone. A separate sum insured. A claim leaves your life cover untouched. At Fidelity it lasts until you are 70.
- Accelerated. Trauma sits inside life cover, and a payout is deducted from the life sum. At Fidelity it can last for life if you keep paying.
The numbers below are round and invented to show the mechanism. They are not a quote.
| Policy | Trauma claim of $100,000 | Life cover afterwards |
|---|---|---|
| $500,000 life, with $100,000 accelerated trauma | Pays $100,000 | $400,000 |
| $500,000 life, with $100,000 standalone trauma | Pays $100,000 | $500,000 |
If you died after an accelerated claim, your family would receive $100,000 less than the original life sum. Fidelity Life's page shows entry ages of 16 to 64 for trauma cover (69 if taken as an accelerated benefit), a maximum of $2 million either way, and says some conditions are not covered for the first 3 months. Other insurers' terms differ; ask for the policy document (Fidelity Life).
What it costs, by age
The Premium Index prices $100,000 of trauma cover at standard rates, non-smoker, class 1 occupation, from rate cards read on 8 September 2026. The ranges run across the insurers that priced each row (Premium Index; method).
| Age | Man, monthly | Woman, monthly |
|---|---|---|
| 40 | $35 to $50 | $35 to $50 |
| 50 | $110 to $130 | $70 to $100 |
| 60 | $300 to $375 | $160 to $225 |
| 65 | $575 to $625 | $325 to $400 |
For comparison, $500,000 of stepped life cover for a non-smoking man costs $300 to $375 monthly at 60 on the same basis. The sums are different: for a man at 60, $100,000 of trauma costs about what $500,000 of life cover does. For a woman at 60 the ranges are $160 to $225 for trauma and $225 to $275 for life cover. These are standard rates, so a health condition may add a loading, an exclusion or a decline, and the premium for a combined policy depends on the structure you pick.
For readers over 50, the practical points are that entry ages stop (Fidelity's trauma cover at 64, or 69 accelerated), and that the cost curve steepens each year. Fidelity offers premiums fixed one year at a time, rising with age, or level term fixed for the life of the policy.
Why guaranteed acceptance does not include it
Trauma cover that you apply for through an adviser is underwritten: it is assessed individually and may be declined, loaded or excluded. We found no guaranteed acceptance product with a trauma benefit among the funeral and life products we have read. Momentum's Quick Life wording lists three events: accidental death, death from any cause, and terminal illness. Terminal illness means expected to lead to death within 12 months, confirmed by an approved practitioner, and payment ends the cover. Momentum's claims page lists a Trauma Benefit form, but the Quick Life wording itself has no trauma benefit (Momentum Life: Quick Life Insurance Policy Wording, November 2025; Momentum Life: Claims).
Quick Life is for ages 18 to 65, $50,000 to $300,000, with no health questions. In its first 2 years it excludes pre-existing conditions and suicide; premiums are refunded if death is from a pre-existing condition and no claim is payable. After a serious diagnosis, Quick Life would pay only on death or when death is expected within 12 months.
Trauma and income protection together
A lump sum does not replace a wage. If a diagnosis stops you working for months, income protection pays monthly while trauma pays once. Ask how the two would work together in the policies you are comparing. We publish no income protection price: the Premium Index withdrew its income protection rows on 9 September 2026 because they priced the wrong benefit. Ask an adviser about waiting periods and what counts as a claim.
Who this suits, and who it does not
A combined structure suits someone who wants to spend less on trauma and accepts that a claim shrinks the life sum. Standalone suits someone who wants both amounts intact and can afford the higher premium. Neither suits a person who cannot answer the health questions comfortably, or one who would rather have cover with no questions: for that, Quick Life gives life and terminal illness cover only. A healthy person can usually get more cover for less with fully underwritten cover through an adviser.
Next steps, and how we are paid
An adviser can structure the limits, compare insurers and read the trauma definitions with you. Advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). QuoteHub is a Momentum Life partner, and Smiths Insurance & KiwiSaver may receive a commission if you buy through our link; see how we are paid. Momentum Life Limited has an A.M. Best financial strength rating of B (Fair), affirmed 11 February 2026; see Momentum's financial strength page. The buttons on this page open Momentum's own application for Quick Life or Funeral Insurance, neither of which includes trauma cover. This page is general information, not advice.
Related reading: what ACC does not cover, life insurance with pre-existing conditions, the guaranteed acceptance hub and the Quick Life page. Written by the QuoteHub Editorial Team and reviewed by the QuoteHub Adviser Team, 20 October 2026.
Frequently asked questions
Does Quick Life include critical illness cover?
No. It pays on accidental death, death from any cause (after the first 2 years for pre-existing conditions and suicide) and terminal illness, which means death expected within 12 months.
Is trauma cover the same as critical illness cover?
In New Zealand the product is usually called trauma cover. Fidelity Life describes it as a lump sum for a defined serious illness or condition.
Does an accelerated claim end my life cover?
It reduces it by the amount paid. In the invented example above, a $100,000 claim leaves $400,000 of life cover.
References
- Fidelity Life: Trauma cover, retrieved 20 October 2026
- Fidelity Life: Underwriting guide (October 2025), retrieved 20 October 2026
- IFSO: Life insurance, retrieved 20 October 2026
- ACC: Injuries we don't cover, retrieved 18 August 2026
- Momentum Life: Quick Life Insurance Policy Wording (November 2025), retrieved 17 October 2026
- Momentum Life: Claims, retrieved 20 October 2026
- Momentum Life: Financial strength, retrieved 20 October 2026
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