Trauma Insurance Calculator

How much lump sum cover would you need if diagnosed with a critical illness?

Step 1: Your Situation

Number of dependent children

Each dependent child adds $500 to your monthly household costs. It is a flat planning allowance, not a survey figure.

How the trauma insurance calculator works

Trauma cover, also called critical illness cover, pays a tax-free lump sum on diagnosis of a listed condition such as cancer, heart attack or stroke, whether or not you stop working. This calculator sizes that lump sum for a New Zealand household by costing a single recovery period: the household shortfall while the earning stops, the treatment you might choose to pay for privately, and the practical costs of adjusting.

What the number on your screen means

The result is the cost of one recovery period, not an annual figure and never a premium. The household shortfall is counted once, as the smaller of your after-tax income and your committed monthly costs, multiplied by the recovery months you chose. A private treatment allowance is then added, plus a fixed $5,000 for rehabilitation and $10,000 for home and lifestyle adjustment.

Counting it once matters. Until August 2026 this tool added lost income AND the living costs that the lost income would have paid, which is the same money twice and roughly doubled the answer for a typical New Zealand household. You cannot lose more than you earn, and you do not need to insure more than you owe, so the estimate now takes the smaller of the two.

After-tax income is calculated with the same New Zealand tax brackets and ACC earner levy as the ACC gap calculator on this site, so the two tools cannot drift apart.
Committed costs are your mortgage or rent, your essentials, and $500 in monthly costs for each dependent child.
Where your committed costs exceed your own after-tax income, the estimate is capped at the income that would actually stop, and the tool says so on screen.

Recovery length is the single biggest lever. Moving from a 6-month to a 24-month recovery quadruples the shortfall component, which is why two households with identical finances can land far apart.

How the private treatment allowance is set

The private-treatment allowance rises with how firmly you would go private and falls as your health insurance gets more comprehensive, and it never moves the wrong way. Choosing the public system adds $0. Committing to private treatment adds $5,000 with comprehensive health insurance, $25,000 with basic cover and $50,000 with none. Answering "maybe" adds half of whichever of those applies to you.

That half-share rule replaced a flat $15,000 for "maybe" in August 2026. The old figure was larger than the $5,000 allowed for committing to private treatment with comprehensive health cover, so a user could state a stronger need and watch the estimate fall.
These are planning allowances held in the tool, not quoted treatment prices, and actual costs vary widely by condition and provider.
Health insurance and trauma cover do different jobs: health insurance pays the medical bill, trauma cover funds the household and the choices the diagnosis takes away.

Why trauma cover exists alongside ACC

ACC pays weekly compensation after a personal injury, so a heart attack, a cancer diagnosis or a stroke produces no ACC entitlement at all. For a New Zealand household, the most likely reasons for a sudden six- to twelve-month interruption to earning are medical rather than accidental, and those are exactly the events sitting outside the ACC scheme. A trauma lump sum is paid on diagnosis, so it can arrive before any income protection waiting period has ended.

How trauma differs from income protection and TPD

Trauma pays once, on diagnosis, and does not require you to stop working; income protection pays monthly, only while you cannot work, and only after a waiting period; TPD pays once, but only if the disability is assessed as permanent. Most people who claim on trauma cover eventually return to work, which is precisely why the money is used for choice, treatment, time, reduced hours, a partner taking leave, rather than for lifetime replacement.

Trauma policies pay against a defined list of conditions, and every insurer's list and severity thresholds differ. Read the definitions, not the headline number.
Some conditions pay only a partial benefit, typically expressed as a percentage of the sum insured.
Cover for children is often available as an add-on and is usually structured differently from adult cover.

The assumptions behind the numbers

Every allowance in this calculator is a round planning figure held in the tool rather than a quoted price, a published New Zealand average or an actuarially reviewed number, so the assumptions are set out in full below.

The household shortfall is the smaller of your after-tax income and your committed costs, per month, multiplied by the recovery months you selected (6, 12, 18 or 24). It is counted once.
After-tax income applies the 2025/26 New Zealand tax brackets and ACC earner levy held in the shared rate file this site uses for every calculator.
Committed costs are your monthly mortgage plus essential costs plus $500 in monthly costs for each dependent child.
Private treatment is a fixed allowance: $0 for public treatment; $5,000, $25,000 or $50,000 for committing to private treatment depending on whether your health cover is comprehensive, basic or absent; and half of the applicable figure for "maybe".
Rehabilitation is a fixed $5,000 and home and lifestyle adjustment is a fixed $10,000. Both are added to every result regardless of your answers.
A result above $300,000 is flagged as a large indicative need; that threshold is a prompt to get the figure reviewed, not an insurer limit and not a recommendation.
Blank fields are no longer filled in for you. The calculator previously substituted an $85,000 income and a $2,500 mortgage for anything you left empty, which produced a confident number about a household that did not exist. Required fields are now required.
No inflation, investment return, ACC entitlement, employer sick leave, Work and Income support or existing trauma cover is deducted from the result.

Common questions

How much trauma cover do I need in New Zealand?: Size it to one recovery period rather than to a lifetime. Take a New Zealand household with an $85,000 income, a mortgage of $2,500 and $2,000 of essential monthly costs: over a 12-month recovery the shortfall this tool models is $54,000, and the full estimate lands near $94,000 once a "maybe" private-treatment allowance with no health insurance, rehabilitation and adjustment costs are added. Dependants, a longer recovery or a firm commitment to private care push it materially higher.
What conditions does trauma insurance cover?: Trauma policies pay against a defined schedule of conditions, and cancer, heart attack and stroke make up the bulk of claims on the indicative New Zealand claim mix these tools are built on. Every insurer publishes its own list and its own severity definitions, so two policies with the same sum insured can behave very differently at claim time. The definitions are the product.
Is a trauma insurance payout taxable in New Zealand?: A personally owned trauma lump sum is generally not treated as taxable income in New Zealand, which is why the full sum insured is usually available to spend. Where a business or trust owns the policy, or where premiums have been claimed as a deduction, the treatment can change, so confirm the position with your accountant before structuring cover that way.
Do I still need trauma cover if I have health insurance?: Health insurance pays the medical bill; trauma cover pays for everything else the diagnosis costs you. Health cover will not replace the income you stop earning, cover a partner taking unpaid leave, fund travel to treatment, or clear a mortgage. This calculator reduces the medical component when you hold comprehensive health cover precisely so the two are not double-counted.
How long should I assume my recovery would take?: The calculator offers 6, 12, 18 and 24 months and defaults to 12. Recovery time depends far more on the condition and its stage than on the person, so if you are unsure, run the tool twice, once at 6 months and once at 24, and treat the two results as the realistic range your cover would have to sit inside.

Related calculators

Risk probability calculator
, shows your statistical odds of a critical illness before retirement.
Income protection calculator
, covers the monthly shortfall a lump sum is not designed to fund.
TPD calculator, sizes cover for the case where recovery never comes.

Talk through trauma cover with a licensed adviser · free, no obligation.

Explore related pages: Life Insurance, Income Protection, Health Insurance, Trauma Insurance, Referral.