Why it’s time for couples to break up…with their health insurance policy
Is it time to cut the convenience on your health insurance?
If you were to have a read of our latest Singles Tax Report, you might think that partnered Australians have successfully cracked the code on cost-cutting.
With the average married couple sitting on $19,260 more in savings than their single counterparts, the data suggests that "doubling up" is the ultimate life hack for beating the cost-of-living crisis.
But there is one corner of the economy where "going solo" may give you the upper hand.
While we are conditioned to believe that "bundling" leads to better deals, private health insurance may be the one exception.
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The relationship surcharge: when it's time to call it quits
On a joint health insurance policy, both partners must maintain the same tier of cover.
Depending on your policy, this could mean thousands of Australians are "over-insuring" one half of their relationship.
For instance, if one partner needs Gold cover for something like a heart condition, the other partner, who might only need basic cover, is forced to pay for that Gold tier too.
The Lifetime Health Cover (LHC) loading is another factor to consider.
If you took our hospital cover to avoid the LHC before you turned 31 and your partner didn't, a joint policy will average that loading out.
So let's say your partner has a 10% loading while you have zero. A 5% loading would then apply to the entire policy.
If your joint premium is $4,000 a year, that 5% loading adds an extra $200 to your bill.
How to trade convenience for real value
If you're weighing up your options or thinking about going solo, here's how to shop smart and make sure you're getting the most out of your own policy:
- Don't just copy your partner's cover. It's easy to default to the same level of cover as your partner, but your health needs and usage might be completely different.
- Build your policy around what you'll actually claim. If you're only using dental and optical once a year, a lower-tier extras policy or even none might be better value.
- Time your switch to take advantage of offers. Health insurers regularly run special offers for new customers, including cashback, weeks free or waived waiting periods. Shop around and keep your eye out for sign-up deals, like the ones you'd find on our Rewards page.
Take the time to run the numbers with your partner on two separate policies using Finder's health insurance quiz. You may find there's a better deal flying solo.
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