Health Insurance

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Now the first report in a series on how to slash your household bills. We're feeling the pinch with costs of different types of insurances, gas, electricity, water, food and groceries - all soaring. And tomorrow, appropriately April 1st, yet another blow for 10 million people with private health insurance. Private health premiums will go up an average of 6%, but up to 12% - an extra $160 to $320 a year more for a family's hospital and extras cover. But, despite those rises, there is a way to save a lot of money.

We spend $13 billion a year on private health insurance - $2,000 on average for a family in hospital and extras. For life insurance, its $3 billion a year - but most of us just keep paying the bills with the same old companies.

Health insurance; it can be mind-boggling trying to compare 38 different funds with varying levels of benefits and extras. So, even though we get a 30% or more government rebate on yearly premiums can we save simply by not insuring at all?

“Those who can afford to have private health insurance should very seriously consider it. It gives you a choice of the doctor you want to treat you and it enables you to have faster access to medical services” says Dr Shiffman.

Medical doctor, Adir Shiffman, runs HelpMeChoose.com.au, a free on-line service that helps compare policies and prices and select the best match.

‘If you turn 30 and you don't have private health insurance the government will impose a penalty if you then take out private health insurance” adds Dr Shiffman.

So whether you're a family, a single person, or over 60, there's is a cheaper and undoubtedly better deal for you.

Deb and Steve Green have been shelling out $313 monthly for comprehensive health insurance family cover - at $3,750 a year, too much strain on their budget.

“What families often do is they are often overwhelmed by the number of things they are covered for on the premium. One example is they were paying for a lot of optical cover for glasses and contact lenses when in fact they don't need that particular cover at all as a family. So one of the things we did we shifted them to a policy that doesn't have that high level of optical cover” explains Dr Shiffman.

Through HelpMeChoose, Deb and Steve have switched to Peoplecare so instead of $313, their new monthly premium's plummeted to $214, that's $2,500 a year instead of $3,750, saving $1,200.

29 year old single, Liam Bui, needs to stay covered for sports injuries, but he's been paying for extras he's not likely to need, like expensive cardiac surgery.

Liam's been paying $75 monthly or $900 a year. Now he’s paying $53, down to an affordable $636 a year, which is a saving of $250 a year.

Empty nesters, over 60s, need comprehensive couples cover but they often keep the old family policies running - paying for redundant extras like orthodontal, even pregnancy and in this case hearing aids they don't need.

HelpMeChoose reduced a typical empty nester's premiums from $380 a month to $136 - $4,560 a year down to $1,630. That an amazing saving of $2,930, two thirds off what they were paying before!

For life insurance there are similar on-line services to help you compare policies and get the best prices but watch out for life insurance companies that offer instant cover for simply ticking a few boxes. For that convenience, the premiums are sky high.

“I would say three out of four people who currently have cover are paying far too much on life insurance. ”Amy Eade is national Manager at Lifebroker. She’s convinced we can easily halve premiums, for the same value cover.

“We have a 40 year old couple who currently have half a million dollars life insurance each. They are paying $1578 per year, we can get it for $721 per year, saving them over $850 per annum … so that is a 54% saving - that is pretty good” explains Amy.

This is how we pay far too much, when we take out a loan or choose fast application life insurance.

“If they had advice from their bank and they take out the banks insurance… if they see an ad that promotes $2 per week for this amount of cover then if they actually shopped around they could be halving the premiums” says Amy.

“Even if you want to stay with a fund that you have been with for many years show them what is out there and ask them to match it.” Peter Carroll is the Director of Australia's most comprehensive on-line comparison site for health funds.

“Under the law if you move from one fund to another you do not have to serve a waiting period again” says Peter.

And if you're not expecting to go to hospital soon, lower your premium with a higher excess.

“They should be looking at the excess they are paying and if they are happy to pay a little bit of a higher excess if they go to hospital they can dramatically drop the price of their premiums” says Dr Shiffman.

Some final advice, to combat tomorrow's price hike:

“It would be a good idea to ask your fund if you can pay yearly and back date to before the 1st of April. That way you can lock in last years premiums before the increase for the 12 months, saving 6% a year” says Peter.

WEBSITES to compare all private health funds:

Ozecover
Website: www.ozecover.com.au

Tel: 1300 326 837 (1300ECOVER)

Australian Government - Private Health
Website: www.privatehealth.gov.au

Help Me Choose
Website: www.helpmechoose.com.au

Iselect
Website: www.iselect.com.au

LIFE INSURANCE POLICY COMPARISONS:
www.lifebroker.com.au

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