Step-by-step guide to switching your health insurance

Changing to a new provider has never been easier. Let finder show you how.

It's easy to see why you'd want to switch health insurance. Throughout life, your needs change, and the reason you signed up to your existing provider may not be your priority anymore.

Whether you want more bang for your buck or just a cheaper level of cover - the good news is it's really easy to switch.

In this guide, we'll break down everything you need to know about switching insurers.

Key points

  • You can switch anytime.
  • You could save hundreds in just a few clicks.
  • You don't have to re-serve waiting periods.

Switching insurers, step-by-step

Just to illustrate how simple it is, here are the three basic steps:

Do your research

Find a new policy that meets your unmet needs. This takes a little time and effort, but it’s worth it.

In with the new

Sign up for the new policy before cancelling the old. Tell them to get in touch with the old insurer.

Out with the old

Tell the old insurer that you've moved on and to expect a call from the new guys. Cancel your direct debits.

See how your current policy stacks up

With one quick search, you can compare quotes from 30+ providers.

What do I need to know about switching?

Both insurers should be well versed in this process and help you through any technicalities. However, it pays to know what's happening on the backend so you can move the process along should bureaucracy get in the way.

Here are some key concepts you'll need to be across:

  • Portability is your friend. This important concept underpins the entire process of switching and it’s the number one reason switching is so easy. It's a guarantee from the government that you can switch health funds whenever you want without being penalised with new waiting periods.
  • Get your clearance certificate. This official document from your old insurer is your key to portability. It lets the new insurer know not to slap you with Lifetime Health Cover loading and it gives you credit for waiting periods you've already served. You can just sit back while the new insurer obtains this themselves, but don't let it slip through the cracks. Follow up with both insurers just to be safe.
  • Review your claims history. Your clearance certificate will also include a claims history. If you've already used up some of your benefits, your new insurer will deduct these amounts from your new limits. Anything with an annual benefit limit will reset every first of January, but anything with a lifetime limit will never reset. Doubling up on benefits is not a reason to switch.
  • Look at the waiting periods if you’ve increased your cover. The only time you will have to serve new waiting periods is if your new policy is more comprehensive than your old one. For example, if your new policy covers pregnancy but your old one didn't, you'll have to wait for that particular cover to kick in. If your new policy has lower excesses and co-pays, you'll still be covered but you'll have to pay the old amounts until the new waiting periods for those services are up. But none of this is any different than if you had upgraded internally with your old insurer.
  • Keep an eye on your duplicate payment. Health insurance premiums are usually billed a month in advance. If your new policy starts in the middle of your old billing period, you'll most certainly have duplicate charges that month. As long as you follow the process correctly, the old insurer will reimburse you for the overpayment. Just keep on 'em about it.
  • Weigh up your loyalty bonuses. It's almost too easy to switch, and some insurers will do anything to keep you. Enter loyalty bonuses: little perks that you can accrue the longer you stay with a single insurer. They'll tempt you with yearly benefit increases (usually for extras), credits you can apply toward out-of-pocket expenses and a range of other discounts, bonuses and giveaways. You new insurer isn't required to honour these, but feel free to ask.
  • Ask about waiting periods for extras. The portability guarantee does not apply to extras, so your new insurer has the right to make you serve your extras waiting periods again. But since they want your business, most insurers will honour your previous waits. Just ask nicely and get it in writing,`just in case.
  • Don’t worry because you’ll have a cooling-off period. Most insurers will refund your money if you change your mind and cancel your policy within the first 30 days of signing up. Just be sure to have another policy lined up, or you risk losing your portability guarantee.

Mother and daughters

How to get a better policy

Now that you know how easy it is to switch insurers, it's time to find your new policy. Here are some simple steps to get you started:

  • Identify your reasons for wanting to switch. Is it to find the lowest price possible while still allowing you to avoid your tax burden? Are you looking for better value for your money? Are you looking to add services like pregnancy or dental? Is your family expanding and you need to add dependents to your policy? Your answer will help guide your search.
  • Compare your options. With your objective set, you can now start considering options. Use our health insurance engine to conveniently compare policies side-by-side. Call around to the different insurers if you have any questions, and check out their product disclosure statements (PDS) for policy details. You can usually find these on insurers' websites or request them directly.
  • Look for intangibles. When narrowing your options, see who goes the extra mile. Who's willing to honour your old loyalty bonuses or extras waiting periods? Who offers wellness programs and health-related discounts on products and services? Who has a good reputation online?
  • Consider negotiating with your current insurer. Your current insurer may be willing to offer you a discount or other perks if you mention that you've found a better deal elsewhere. Worst case scenario, they say no and you take the better deal. Best case scenario, you save money by sticking around and you keep your loyalty bonuses.
  • Get it in writing. If your new insurer made any promises that aren't outlined in the PDS, get those in writing. This can include an agreement to honour your extras waiting period, an agreement to honour past loyalty bonuses or any discounts and perks offered during negotiation.

Switching to an upgraded policy with a new insurer

One of the reasons people switch health insurance providers is because their life circumstances have changed and they need an upgraded level of cover. Not all aspects of upgrading are protected by portability, but it’s a moot point because it's no different than if you had upgraded policies through your current insurer.

While the outcome is the same either way, it still pays to understand what happens when life calls for something new:

  • You’re getting married and want couples insurance. One of you can move over to the other person's plan, or you can both jump ship and find a brand new policy together. If the level of cover is the same for both of you as it was with your individual policies, all portability requirements will apply. But if it represents an upgrade for one or both of you, then one or both of you will have to sit out the waiting periods for any new benefits the new policy offers.
  • You're planning to have a baby and need pregnancy cover. Assuming your old policy didn't cover pregnancy, you'll have to sit out the standard waiting period for those services (typically 12 months). Try and calculate what this means in terms of a delivery date, but remember that babies seldom come when they’re expected.
  • You just had a baby. This definitely calls for an upgrade, but it's probably not the best time to switch. The next section will explain why.

You might move to a lower level of cover if:

    • Your dependants have moved out and you no longer need to cover them under your policy
    • You are past the age of needing pregnancy cover
    • Your financial circumstances have changed and you need to save money on your premiums.
  • However, switching to a lower level of cover can affect you negatively in terms of your eligibility for the Medicare Levy Surcharge (MLS). This is an additional tax of between 1% and 1.5% imposed on high-income earners who don’t have adequate hospital cover.

    Is it a good idea to switch policies right after having a new baby?

    Your pregnancy benefits will cover your birth and related services, but if you want your baby covered beyond that point, you'll need to upgrade to a family policy and pay any additional premiums. That said, it probably makes sense to organise all that with your current insurer and make the switch later.

    Most insurers will back-date your baby's coverage to the date of birth and credit them with any waiting periods you (the primary policyholder) have already served, but only if you add them to the policy within a certain amount of time. This time frame could be as short as 2 months if you're currently on a singles/couples policy or as long as 4 years if you already have a family policy. Everyone on the new policy will have to serve waiting periods for any new areas of cover.

    Welcoming a newborn is hectic enough as it is. So it's probably not the best time to be juggling the switch, the upgrade and the time constraints affecting your baby's waiting periods all at the same time.

    When is the best time to switch?

    The best time to switch is when your life circumstances require it or you haven't reviewed your current policy for a while. However, health insurers often offer sign up incentives throughout the year so it's always worth keeping an eye on current deals and offers that may be available. It's also worth reviewing your price rise every April 1 to see if you're still getting value for money from your current policy.

    Ready to switch? Compare 30+ Australian funds

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