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Cover what you need, when you need it

If you’re like most people, the thought of regularly reviewing your health insurance may be too much to deal with. Policies are complex and hard to understand, and reviewing your options has historically taken lots of time. At insurely, we’ve made the comparison process much, much simpler. But whether you use us, our competitors, or do your own research, in this article we’ll explain why it pays to regularly review your needs and change your level of cover when it makes sense. We’ll also highlight a couple of things you may not have known that work in your favour when it comes to changing policies.

A policy for every life stage

Let’s start with the simple stuff. What your policy covers usually doesn’t change very much. From time to time your insurer may make modifications, but these are likely to be relatively minor. A policy geared towards a growing family will always be just that. But while policies are usually quite stable, we are anything but. Over the course of our adult lives, we move through a number of somewhat predictable phases. We usually start young and healthy. Some of us then start families, and we all move into middle and then old age.

In fact, these life stages are so predictable that insurers design products around them. There are ‘young and healthy’ piece of mind policies. There are comprehensive policies geared towards older adults that cover hip & knees, cardiac and eye surgery. These life stages are also the usual triggers for reviewing our health insurance. For example, when we’re looking to start a family, we naturally want to make sure pregnancy is included in our cover.

So if you have recently moved into a different life stage and haven’t reviewed your policy, you should. But this is really the minimum for how frequently you can and perhaps should be reviewing your policy. More frequent reviews can save you thousands of dollars over the long term.

Your life, your policy

Life stages describe the typical process that we go through over time. At an individual level though, life stages are only a small part of the picture. Life stages miss the nuances of the specific health concerns each individual has. Over time, we may accumulate health issues (most of us). If we’re lucky, our health may also improve – things that were once health concerns may no longer be. And in resposne to these changes, you can be surprisingly agile when it comes to adjusting your health insurance coverage. This is made possible due to a couple interesting features of private health insurance, which make it different to other types of insurance that you may be used to:

  • Community rating – the price you pay for a policy is not dependent on your age or health. For a given policy, a 25 year old pays the same as a 95 year old, and a smoker pays the same as a non-smoker. This is the government’s way of making health insurance accessible and affordable for everyone. The only exception to this rule is if you haven’t been covered since turning 31, where you will need to pay the Lifetime Healthcover Loading.
  • Waiting periods – if you switch, you don’t need to re-serve waiting periods. Let’s say you’re on a policy that provides mid-level cover, but it doesn’t cover you for knee reconstructions. And let’s say you start playing contact sport and decide that you need cover for a knee reconstruction. While you may have to serve a waiting period for knee reconstruction coverage, any waiting periods you have already served on your mid-level cover mean you don’t need to re-serve those with a new insurer. You do need to be careful when it comes to pre-existing medical conditions – while your insurer can’t deny you coverage, you are likely to have to serve extended waiting periods (typically 12 months)

Putting community rating and waiting periods together, you’re best off taking out coverage before you need it, but only just. We’re not suggesting you change your policy as often as you change your clothes. But as long as you listen to your body and your doctor, it shouldn’t be too difficult to stay ahead of the curve. Depending on your risk profile you may want still want to err on the side of safety. You may otherwise decide to be more aggressive, and rely on the public system while you serve additional waiting periods. Just remember the flexibility and protections you have as a policyholder. These have been put in place to make switching as effortless and easy as possible.

Factoring in loyalty benefits

Some insurers provide rewards and benefits for loyal members. Increasing extras limits for each year of membership is a good example. Loyalty benefits are not that common yet, but it wouldn’t surprise us to see them being used more widely in the future. When you are evaluating whether it’s worth changing policies, you should consider any loyalty benefits that you may lose. They may tip the scales in favour of keeping your policy.

Know your policy and know your needs

At a basic level, this advice boils down to knowing your policy and knowing your needs. Many people are put off by the perceived complexities of switching. Many also don’t understand the community rating system, or expect to have to re-serve their waiting periods. Armed with the facts, we hope you find it much easier to take control of your policy, have an appropriate level of cover, and save money.

Call your insurer to discuss your options, or get personalised recommendations from experts, tailored to your specific needs with insurely.

IlanCover what you need, when you need it
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