Health Insurance, it’s a divisive subject. Some people swear by it, others refuse to even consider it.  The reality is, it is an individual choice and needs to be treated like any other insurance. It’s important to review it regularly to ensure you are getting what you pay for and what you need.

Most children will be removed from the family policy when they turn 22. This age could differ, as each fund is different. Once removed from the family policy, they can usually elect to stay on extra premium or they can arrange their own policy.  It is important to discuss with them the advantages and disadvantages of having health insurance, what their financial commitments are and if it is worth them having a policy.

Taking out health insurance after the age you have turned 31 carries a financial penalty called the Lifetime Health Cover (LHC) loading.  For each year after your 31st birthday that you don’t have private hospital cover, it adds 2% to the base premium.  This will eventually be reduced when the hospital portion of your cover is held continuously for 10 years.  There are other circumstances that can affect the reduction of LHC loading on a premium and you can review these on the Government website for private health.

Many young families start out needing cover for a variety of services including pregnancy and obstetrics but as their family grows up it is important to review the policy and check for any services that can be removed from the policy, perhaps offering a reduction on the policy premium.  As your family grows your needs will change and the policy will need to change to reflect these new circumstances.

The other important thing to remember is private health insurance is not compulsory in Australia.  We are very lucky in this country that we have a public health system that supports all Australian citizens.  In an emergency situation, you will always end up in the nearest Public hospital being treated with the highest care possible regardless of if you have private health insurance or not.  For families, it is important to compare the cost of the policy with the extra tax you may be paying by not having a policy.  And when speaking with your children coming off your policy it is important to remember this too.  The lifetime health cover loading will not be passed on until after they turn 31.

Key points to remember; like any insurance policy review it regularly, check for inclusions and, more importantly, the exclusions to make sure they fit your family.  It is also worth looking at your income versus the extra you would pay in Medicare Levy Surcharge if you didn’t have a health insurance policy.

Please note, the above provides general advice and has not taken into account your personal or financial circumstances. If you would like more tailored insurance or financial advice, please contact us today. One of our advisers would be delighted to speak with you.