Health insurance: should you switch

THERE are plenty of people considering switching health insurers as providers prepare to hike premiums, but there are five things to consider first.

HEALTH insurance premiums are set to rise next week leaving many policy holders reviewing their cover to see if they can nab a healthier deal.

But experts believe before rushing to make changes to your policy or dropping it altogether there are five essential things that you need to weigh up with your cover.

KOCHIE: How to invest in a start-up

NO-BRAINERS: How much you can save by quitting smoking

INSURER LOYALTY

Simply sticking with the one insurer means consumers are often missing out on better deals that are rolled out for new sign-ups.

So being a longstanding health customer certainly won’t win you any brownie points or discounts.

Go on the hunt to see what other offers are available including visiting individual insurers’ websites and health comparison websites or phoning them direct.

EXCESS COSTS

This can make a big difference when you pay a visit to the hospital and range anywhere from $250 to $1000.

ISelect’s spokeswoman Laura Crowden said it pays to zoom in on this cost because it can hit hard when you do end up going to hospital.

“Look for a policy with only either an excess or a co-payment,’’ she said.

“Avoid policies that require you to pay both an excess and a co-payment if you are admitted to hospital.”

Usually the higher the excess the lower the premium.

REVIEW EXTRAS

It’s important to regularly review these which help cover costs for expenses such as dental, optical and physio to ensure you are getting value for money.

Ms Crowden said, “Ask your current fund for an annual claim statement which will show you how much you’ve paid for extras and how much you received back in benefits.”

She also suggested opting for a set percentage back on extras (usually between 50 to 80 per cent) up to an annual limit rather than a set dollar limit.

Make sure your money stays as healthy as you. Thinkstock

LIFETIME HEALTH COVER LOADING

LHC is designed to make people take out hospital cover earlier and keep it. Bupa’s health insurance managing director Dr Dwayne Crombie said it can be costly later in life if you haven’t had hospital cover.

“If an individual doesn’t purchase a hospital health insurance cover before 1 July following their 31st birthday, they will pay an additional 2 per cent “loading” for their health insurance premium for every year after this date, locking in the increase once they take out hospital cover, capped at 70 per cent,’’ he said.

So if you are going to take out hospital cover you should do before age 31 or face escalated premiums.

PAYING UPFRONT

Premiums jump by 4.84 per cent on annual from April 1 so if you pay a year in advance you will avoid this increase.

It can be a lot to fork out in one hit but it can end up saving you hundreds of dollars over the next 12 months.

Originally published as Health insurance: should you switch