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Time to use it, or lose it, with private health insurance

Simple tips that will help you decide whether it’s use it or lose it time with private health insurance extras.
November 4, 2018

For many weeks now I’ve been meaning to call my private health fund to check my extras cover. I’m simply not using it and it’s time to switch it off.

In a timely jolt to act, consumer group CHOICE is encouraging Australians to use it or lose it before any remaining benefit runs out on December 31st.

So today I’ll make the phone call on my $20 in monthly extras but I’ll also ask my insurer for an annual claims statement. This will tell me whether the premium paid was worth what I’ve received in actual benefit this year.

“Given that most private health insurance benefits tick over on January 1st, it’s a case of use it or lose it when it comes to extras cover,” says CHOICE spokesperson, Nicky Breen.

“We know that most people cite extras are one of the main reasons they take out health insurance, so if you are paying for extras cover it’s essential you make the most of your money.

CHOICE says the majority of funds, including BUPA, Medibank, HCF and NIB, reset their customers’ extras insurance at the end of each calendar year.

There’s no tax incentive for taking out extras insurance so it’s best to think of the cover as a savings account with an expiry date.

Extras insurance pays benefits for health costs including optical, dental, physio, podiatry, chiropractic, massage and counselling. It may also help with the cost for hearing aids, blood glucose monitors or medication that isn’t subsidised, such as travel vaccinations.

“If you’re planning on getting your teeth checked or have been putting off a trip to the phsyio, now could be the best time to go if you have credit left on your yearly limits,” Ms Breen says.

“If you need a new pair of glasses you could even double your benefit as some funds allow you to claim for the lenses at the end of one year and the frames at the start of the next.

Here are some tips from CHOICE that will help you decide if your extras are worth it.

1. Ask your insurer for an annual claims statement. If you are paying more in premiums than you are receiving in benefits you may want to reassess whether you need extras cover at all.

2. Remember there is no tax incentive for taking out extras cover. Extras cover is effectively a budgeting tool.

3. If you decide you don’t need extras cover, it’s worth considering setting up a savings account and banking the same amount you would have paid in premiums.

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November 4, 2018
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