Blown out 31 candles in the last year?

Richard Laycock 1 June 2017 NEWS

Group sitting around a table celebrating as one blows out birthday candles on cake

Get hospital cover before 1 July 2017 or you could be paying a premium for private health insurance.

If you've turned 31 in the last year, or will be turning 31 before 1 July 2017, you may want to think about taking out private health insurance or risk getting slugged with the Lifetime Health Cover (LHC) loading.

Introduced in July 2000, LHC is a loading on your health insurance premiums that goes up incrementally each year you don't have adequate hospital cover after 1 July following your 31st birthday. The loading was introduced to encourage Australians to take out private hospital cover rather than relying on the public health system.

If you don't have cover by age 31 and you decide to take out private health insurance later in life, your premiums will go up 2% every year you don't have hospital cover beyond the age of 30. So, if you wait until you're 35 to get cover, you'll be paying an additional 10% for health insurance than if you'd taken out cover before you turned 31.

The loading remains in effect until you've held private health insurance for 10 consecutive years.

There has been talk about the possibility of a reverse LHC. The Lifetime Health Cover Discount (LHCD) would reward those taking out cover with a discount on their insurance premiums of 2% for every year they had cover before their 30th birthday. Unfortunately, this incentive doesn't have any legs yet.

If you do have hospital cover already and are just looking for a better deal, make sure you check out our EOFY health insurance article and review the promotions on offer from various Australian health funds.

Compare your health insurance options

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Picture: Shutterstock

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