What Is Accelerated Cover?
Accelerated cover is a type of insurance setup where one benefit (usually trauma or critical illness) is linked to your life insurance. If you need to claim on that trauma cover the payout is made in advance from your life insurance sum.
For example, let’s say you have $300,000 of life insurance and $100,000 of trauma cover that’s set up as accelerated. If you make a trauma claim the insurer pays out $100,000 now. Your life insurance is reduced to $200,000 as a result.
That’s why it’s called ‘accelerated’. It means the insurer is paying part of your life cover early due to serious illness or injury.
How Is This Different From Standalone Cover?
With standalone cover your trauma or critical illness policy is separate from your life insurance. If you make a trauma claim it doesn’t affect your life cover at all, you can still claim the full amount later if you pass away.
Accelerated cover, by contrast, shares the total amount. You get one payout now (trauma) and the rest later (life cover), if needed.
Standalone cover generally costs more because you're paying for two separate pots of money. Accelerated cover is more affordable which is why many people choose it. However, it comes with that trade-off in total payout value.
Why Would You Use Accelerated Cover?
Accelerated cover can be a good option if you want trauma or critical illness protection but need to manage the cost. It offers real protection when you need it most, during a serious diagnosis or life-altering health event, without the higher premiums of standalone cover.
It also gives you flexibility. Some people choose a mix: an accelerated trauma benefit with a small standalone benefit on top, or income protection alongside accelerated life and trauma cover.
Your adviser can help you work out the right combination based on your budget, goals and family situation.
What Happens After a Claim?
If you make a successful accelerated trauma claim your life cover is reduced but you don’t lose protection entirely. Some insurers allow you to reinstate the life cover later (without new medical questions) depending on the policy.
For example, if your trauma benefit was $100,000 and paid from your $300,000 life policy then your life cover drops to $200,000. You might have the option to “top it up” again down the track. This is something to talk about with your adviser when choosing your policy.
Keep in mind: if you pass away after receiving an accelerated trauma payout your remaining life insurance will be reduced by that amount.
Is Accelerated Cover Right for Everyone?
Accelerated cover can be a great way to get essential protection in place when cost is a concern but it does mean your total insurance payout is reduced if you claim early.
It’s a useful option if:
You want to keep premiums lower
You’re just getting started with insurance
You have other cover types (like income protection) to support you
But if you want to make sure your full life cover is preserved, even after a serious illness, a standalone trauma policy may be a better fit.
Understand What You're Covered For
Before choosing between accelerated or standalone cover it’s important to understand:
What conditions are covered
How much each benefit pays out
How one benefit affects the other
Whether you can reinstate cover later
An insurance adviser can help explain the options clearly and make sure your policy fits your life, goals and budget.
One Policy, Two Purposes — With a Balance
Accelerated cover is a clever way to combine protection against serious illness and death in one policy. It offers valuable support when life takes an unexpected turn. Just remember that claiming early will reduce what’s left later. With the right advice accelerated cover can give you peace of mind and financial breathing room without overextending your budget. It’s all about finding the balance that works for you.