Medical Insurance – what you need to know

For some it’s essential, for others it’s a luxury.


Private medical insurance or health insurance as it is known more by these days is something that often creates quite a debate amongst people. This is mainly because as a nation we are actually lucky enough to have access to “free” healthcare and many people argue that going private is a waste of money and not a necessity.

This is all well and good if you have time on your side, but if you are ill and need to see a specialist or want a scan quickly, health insurance does give you a pass into the fast lane. For some people having the option of health insurance is essential but for others they might simply not be able to afford it. That’s why it is so important to understand exactly what your needs are and what you are actually getting for your money.


Take a look at the our 5 considerations when looking into buying health insurance:


1. Know what your plan includes

There are so many plans out in the marketplace it can be a minefield and difficult to know what is right for you. Make sure you either read the small print or get your adviser to go through it with you. There are some policies that simply cover the cost of doctor’s visits and prescriptions and then there are others that give you access to potentially revolutionary drugs. Drugs change all the time, so wouldn’t it be nice to know you could choose from the widest assortment?

When you come to selecting a policy make sure you know what is important to you and which policy fits your budget.


2. Understand your excess

Just like when you have a car crash you have to pay an excess, the same is true for when you use your medical insurance. However, there are varying amounts of excess that you can pay and this will have an effect on your premiums.  The simple maths here is the higher your excess the lower your premium. So if you are trying to save money but still want to have health insurance then you might want to think about opting for a higher excess. The most common excess cost is between $250 and $500.

It just means you need to keep some money in the bank to cover your excess. It sounds obvious but remember the excess should only be viewed as a percentage of the cost. So $500 out of $1500 seems a lot, but $500 out of a $50,000 cancer treatment is nothing at all. Are you the kind of person that sweats the small stuff, or a bigger picture person? This might affect your decision-making!


3. Think of alternatives

If you are still unsure if you can afford health insurance then why not look into alternatives such as getting your employer to pay, or starting your own emergency health fund. Either way this reduces your costs and gives you peace of mind should you need any medical attention. The other option that is available from some providers is the 80/20 plan which means you pay smaller premiums but if you need to use your plan then you pay 20% of the cost of the procedure and your provider pays the rest. These are affordable plans but be aware 20% can soon add up to a lot of money and that costs escalate over time too! What was a $20,000 operation a few years ago is perhaps now a $50,000 operation!



4. Healthy Lifestyle

You may be able to save money on medical insurance by simply living a healthy lifestyle. Some providers will give upto 15% off the price of the premium if you pass the healthy lifestyle test. It is also important to let your provider know if you have quit smoking as this can reduce premiums substantially.


 5. Disclose everything

There is no point in trying to hide anything and it’s best to come clean and be honest from the outset. Why give all your hard earned money to your insurance provider only to find out that you are not covered because you did not disclaim something. The best thing to do is to disclose everything and let them decided whether this will have an effect on your premiums.


If you would like to talk to one of our specialists about health insurance or you would like to book a review then please contact us at FDG. We will be happy to talk you through it and make suggestions on ways you could better save.





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