You’re not profiting from your kid being sick—here’s what child cover actually does
Child cover might sound like something you’ll “look into one day”—you know, after school fees, groceries, and sleep. But if you’ve ever had to take time off work because your kid had a cold (or the dreaded daycare gastro bug), you know how fast your world can stop for theirs.
Now imagine if something much worse happened. That’s where child cover comes in.
“If anything happened to my girls, I’m out. I’m not going to work. There’s no way I’d be in the right headspace.” – Phil Thompson, Skye Financial Adviser
Child cover is a trauma insurance policy designed for kids. It pays a lump sum if your child experiences a serious medical event—think cancer, coma, or major burns. It’s not about profiting from pain. It’s about protecting your finances in the middle of chaos.
What is child cover, really?
Child cover is a form of trauma insurance for kids. If your child suffers a covered critical illness or event, you receive a lump sum to help with medical costs, income loss, or just staying afloat while life turns upside down.
Events may include:
Cancer
Coma
Major organ transplants
Severe burns (usually a minimum percentage of body)
Loss of sight or hearing
Bacterial meningitis (not viral)
Paralysis or loss of limb
Source: MLC Life Insurance: Child Critical Illness
Not every insurer covers the same conditions. And the level of severity matters. Your adviser will read the PDS (Product Disclosure Statement) so you don’t have to interpret what counts as “major.”
“You probably don’t want to be doing PDS research while your kid’s in hospital. Let your adviser do that bit.”
Why do I need child cover if I already have insurance?
A common misconception: your income protection will cover time off to care for your sick child. Not true.
Your income protection is for you. If your child gets seriously ill, there’s no payout. That’s why child cover exists.
“There’s no way I’m going to work if something happens to my girls. But I know my income protection won’t pay me for that.”
What’s included in child cover?
Each insurer has their own list, but child cover usually includes critical illnesses and trauma events such as:
Bacterial meningitis
Blindness or deafness
Severe burns (must be extensive)
Major organ transplant
Coma
Cancer
Loss of limbs
There’s also one insurer that offers a $5,000/month carer benefit if you take time off to care for your child—even when a trauma payout isn’t triggered. You’d need to take out $200,000 in child cover to access that benefit.
When can you get it—and how long does it last?
Most insurers let you add child cover from age 2, though a few now allow it from age 1. Coverage usually ends between age 21 and 26, depending on the insurer.
Some insurers require you to have your own policy before you can add child cover. One insurer lets you have standalone child cover with no adult policy attached.
Who can be covered:
Biological children
Stepchildren
Adopted children
Most insurers allow you to cover up to 5 or 10 kids. If you’ve got more, you’ll need to spread the love across multiple policies.
What happens when they grow up?
Many child cover policies can be converted into adult cover—no medical checks required.
If your child develops a health condition after the policy starts, they can still get cover as an adult without exclusions for that condition.
“We’re not just protecting them now—we’re future-proofing their access to insurance as adults.”
This is huge if there’s a family history of illness. Many trauma policies exclude cancer based on family history. But if your child already has trauma cover in place, they can carry that into adulthood.
But am I ‘profiting’ off my kid’s illness?
No. Let’s bust this myth.
Child cover only pays out for serious trauma events. You won’t see a cent for ear infections or tummy bugs. If you’re getting a payout, it’s because something really bad happened.
That payout can help with:
Time off work
Out-of-pocket medical costs
Specialist treatments
Travel for care
Mental health support
“You’re not profiting. You’re surviving. And using every cent to stay by their side.” – Aimee
And no, setting up child cover doesn’t mean you’re manifesting disaster. It means you’re planning for peace of mind.
How much cover can I get?
Most insurers offer $10,000 to $200,000 in child cover
One allows up to $500,000
Minimums usually start at $10,000
Your adviser will help tailor the right amount for your budget and situation. Like everything in insurance, it’s not one-size-fits-all.
Lastly...
Most of us wouldn’t hesitate to cover our car or phone. But when it comes to our kids, we often delay the hard conversations.
Child cover isn’t just about money. It’s about creating room to breathe when life gets terrifying. It’s about ensuring you don’t have to weigh work against being present at a hospital bed.
And it’s about giving your kids a head start—access to adult cover later on, without medical hoops to jump through.
“The last thing you want to be doing is setting up a GoFundMe while your child’s in hospital.”
“The last thing you want to be doing is setting up a GoFundMe while your child’s in hospital.” – Aimee