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When is the right time to take out private health insurance?

When should you take the plunge and get your own health cover? The short answer is: long before you need it.

Here’s the top five reasons to get private health insurance early in life – and keep it.

  1. Continuity of health care

If you’ve been covered under your parent’s health insurance, taking out your own cover as an adult is the logical next step. Why would you suddenly leave yourself exposed and without cover? Sporting injuries and wisdom teeth extraction are a couple of common hospital admissions for young adults.

  1. Lifetime Health Cover

The government recognises the benefit of taking out hospital cover early and encourages you to do so by age 31. The Lifetime Health Cover legislation makes it more expensive the longer you wait to take out cover – 2% per year, up to a maximum of 70% – is added to the premium of people who get covered later in life. And once a loading applies, it remains in place for 10 continuous years of cover. That could cost around $3,000 more over 10 years if you don’t get hospital cover until you turn 40. Yikes.

  1. Waiting periods

Waiting periods ensure you contribute to a fund before being allowed to claim benefits. That’s for the protection of all members. Waiting periods vary from fund to fund and the type of treatment. But if you take out cover when you suspect you’ll need treatment, every fund will investigate whether your condition is pre-existing. Even if you hadn’t been formally diagnosed, if you need treatment for a pre-existing condition, you will have a 12-month waiting period. Similarly, major dental treatment and obstetrics usually require a 12-month wait.

  1. Be prepared for the unexpected

No-one plans to get sick or injured. When you have an unexpected health crisis, you want it fixed quickly. Having private health cover means you can skip the lengthy public hospital waiting lists and get the treatment you need almost immediately. So you’re better sooner and back on your game quickly. That’s called peace of mind – and it’s a great feeling.

  1. Medicare Levy Surcharge

With the government freeze on the Medicare Levy Surcharge income thresholds since 2014, more people are finding themselves creeping into a higher income bracket. Most people contribute to the health system through the Medicare Levy at tax time. But the Medicare Levy Surcharge (MLS) is an additional tax applied to people without private hospital cover. If applicable, the MLS kicks in for a single earning more than $90,000 and adds up to $1,050 to his or her tax bill. And the surcharge increases as income rises.

Apart from being there when you need it most, private health insurance can also help to keep you well, feeling great and living life to the full. It’s an active choice you can make to take control of your health – which makes sense sooner rather than later.

Learn more about the benefits of private health insurance.

Category: Your Insurance


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Article by: Defence Health