Pre-paying health insurance premiums to beat the imminent price hike due to means testing has proven popular with tens of thousands of Australians. But before you hand over your money, it’s wise to check your cover.
Health insurers are offering the chance to pre-pay up to two and a half year’s of premiums in advance to save on any increases which may arise from the means testing of the Government’s Private Health Insurance rebate. Pre-paying premiums will also help you beat the annual increases announced in April.
If you think you may benefit by pre-paying your premiums, it is first worth considering if you have the right level of cover, as any changes made during the prepaid period may negate any financial benefit. Changing the level of cover you require will be cause for your policy to be cancelled and a new one issued under the new rebate system.
Reviewing your private health insurance is something which you should do annually. You may be paying for services, such as pregnancy or orthodontics, which you simply no longer require. Contact your health insurer to find out exactly what you are covered for and then decide if it is still needed. This simple review could save you money.
Three things to consider before you pre-pay
1. Plan before you pre-pay
Whilst pre-paying your health insurance sounds great, make sure you have thought about what you want and need from insurance over the time you are pre-paying. If you alter you policy over the pre-paid period you will lose out on all those government benefits you were trying to secure by pre-paying in the first place.
2. Do your research
Don’t rush these things. Health insurance is there to protect you so it is vital that you do your research and ensure you are locking yourself into the best policy. Use comparison sites, see if there is any ratings on the product you have or are looking at getting. Call the insurers or brokers and ask questions – you’re not meant to know everything so call a professional that will be able to give you correct and useful information.
3. Expect the unexpected
When pre-paying insurance it is vital you cover yourself for those un-foreseeable things so you don’t have to increase or change your insurance down the track. Asking your GP is a great way to get a good idea of what you’re likely to need cover for. They know you and your family’s health the best and will be able to tell you whether you’re likely to need a knee replacement or eye surgery in the foreseeable future.
Once you have decided the correct level of cover, you may wish to shop around for the best deal. Websites such as CompareHealth allow you to do this online, without making any commitment.