Your Money

Health Insurance… why

- March 9, 2016 3 MIN READ

Private health insurance premiums are set to increase by an average of 5.59 per cent from the 1st of April, so now is the time to act to make sure you’re getting value.

And it all boils down to you taking an interest. Never automatically renew any insurance policy, especially private health insurance, without checking you have the right cover for the right price.

So what are the steps?

Do I even need private health insurance?

With premiums rising so quickly, many people ask us, “should I just cancel my cover?” Believe us, we understand why you may think that way, we just don’t recommend it.

Firstly, Private health insurance provides you with a broader choice of treatment options than Medicare, both for hospital treatment and common health services such as dental, optical or physio.

Plus, if you earn above $90,000 a year for singles or $180,000 for couples and don’t have private health insurance, you’ll pay a Medicare Levy Surcharge of between 1 and 1.5 per cent of your income.

On top of that, if you don’t have hospital cover by the time you’re 30 years of age, you’ll pay a 2 per cent loading on your premium for every year you are aged over thirty.

So the financial penalties for not having private cover can really mount up.

How do I choose the right cover for me?

It’s sometimes possible to save a significant sum simply by choosing a more appropriate policy.

To do this, first make a realistic assessment of your health needs and how you expect them to change over the short-to-medium term.

If you have 20/20 vision and are in good physical health, paying top dollar for extras such as physio and optical cover may not be worth it.

But if you’re planning on having a baby in the next couple of years you’ll want to be fully covered for pregnancy related services.

Not sure what you’re after? Speak to your insurer. They’ll ask you a series of questions to establish your needs, and talk through your current policy in detail.

How do I cut costs?

Your main options for cutting costs are dropping unused hospital or extras services, increasing the excess you pay, paying your premiums annually or switching to another insurer.

As always, there are pros and cons for each.

Cutting cover down to the bare minimum will save you money on premiums, but it often means you’ll receive less benefits for services that you do claim on.

Plus, if you suddenly decide that you do need cover for a particular treatment… major dental for example… then there will be a waiting period before you can access a benefit.

Before switching to another insurer, do a full comparison of your current policy versus the new one and be careful you are not losing important benefits. And remember, if you have a trusted service provider such as a physio or dentist, you may not get the same rebate from them with your new insurer.

Raising your excess is another way to save money but, again, be careful.

While the savings can look tempting now, if you were in an accident or needed treatment for an illness, could you afford the higher payment? And is that something you want to be worrying about in this kind of scenario?

As a safety net, maybe put the savings from any lower premiums into an “emergencies” savings account for any unexpected eventualities.

Remember, while saving money is great, if it puts you or your family’s health in jeopardy, it’s not worth it.

When it comes down to it, the simplest option is to review your current policy against your needs, then compare the market and see what else is out there.

You’re then in a strong position to negotiate with your current provider for a better deal or more appropriate cover. Good luck!

 

SMART PRICING FOR SMART PHONES

Mobile phones – we all have one, but getting the best deal isn’t always easy.

Here’s what you need to know.

  1. DO YOU WANT PRE-PAID OR POST-PAID?

A post-paid contract usually comes with a handset, but you’re locked into that plan from 12 to 24 months.

A pre-paid sim card will allow you greater flexibility in terms of what you spend, but you’ll also need to top your credit up regularly and make sure it doesn’t expire before you use it all.

Which is best for you comes down to how much you use your phone, how much you’re willing to spend, and whether you can afford to purchase the handset you want outright.

  1. LOOK AT WHAT’S INCLUDED

Plans for certain handsets will be pretty similarly priced across different providers, so it’s the included features that will set them apart.

Look closely at what each plan offers to make sure it aligns with how you want to use it.

If you go over your allotted calls, texts or data, you’ll likely be charged a penalty for doing so or worse, they’ll charge you per unit for the extras you use.

  1. FINALLY, DON’T BUY INTO THE HYPE

Phone companies want you to upgrade your phone as often as possible… that’s how they make their money.

But do you really need the latest and greatest model?

Getting a bit more life out of your old handset will lead to big savings in the long-run.