Money Hack: Save up to 10% on your health insurance
The introduction of the lifetime health cover discount means savings for the young.
The government announced this week radical changes to private health insurance sector.
This is great news for young people as this health insurance reform is designed to attract more young people to take out cover.
That's right, the long-awaited introduction of a lifetime health cover discount (LHCD) is about to happen and might be able to save you a whole bunch of dollarydoos.
The hack
Details are sketchy at the moment as to when these changes will come into effect, but what we do know is that those who choose to take out cover between the ages of 19 and 29 will be able to get a 2% discount on their premiums for every year they hold cover.
The discount is capped at 10% and will remain in place until you turn 40.
But what does that mean in dollar amounts?
If we say that an average policy costs $2,000 before the discount that same policy would cost $1,960 with the 2% discount applied.
Now, if we increase the cost of the average policy by the average price increase since 2010 (5.6%), that policy without the discount in year two would cost $2,112 versus $2,028 with the LHCD.
If we continue this calculation through until the age of 40, those taking out cover at 25 before the introduction of the LHCD would have paid $45,162 for their private health insurance versus $41,069 post LHCD.
That comes to a savings of $4,093.
While these governmental reforms are designed to slow the average price increase each year, those who were already inclined to take out cover while they're young will be saving on health cover.
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