Health insurance ‘extras’ wasted by two thirds of Australian policyholders
- Almost 8.3 million Australians clueless about their extras usage
- There were up to $4.5 billion worth of unclaimed extras over the last financial year alone
- finder.com.au tips to pay less for extras cover
August 23, 2016, Sydney, Australia – Over eight million Australians are wasting their health insurance extras, new research by finder.com.au, Australia’s most visited comparison website, shows.
The national survey of 2,033 participants found that over two thirds of Australian policyholders (68%) have no idea what portion of their extras policy – which covers treatment such as dental, physio and optical – is unused.
With 12.2 million Australians signed up for extras cover, according to finder’s analysis of APRA data, this equates to a potential $4.5 billion a year in ‘wasted’ extras or the equivalent of $550.16 per person.
Bessie Hassan, Money Expert at finder.com.au, says it’s crucial to make sure you’re getting the most out of your cover by keeping track of how much money you have left to claim on your extras.
“The vast majority of policyholders don’t monitor how much money their policy leaves them to claim on extras.
“That’s a lot of money pocketed by insurers because Australians aren’t keeping tabs on what they’re entitled to,” she says.
Ms Hassan said with private health insurers increasing premiums on average by 5.59% in 2016, it’s more important than ever to make sure you know you’re getting the most out of your policy.
“Before renewing your extras cover, ask your health fund for a claims statement. If you have paid out more in premiums than has been paid for treatments, you’re paying too much,” she says.
“Health insurance customers have only used their extras cover three times on average since January 2016. At this rate, consumers are likely to barely come out in front.”
Ms Hassan urges people to use more of the services they were covered for or alternatively downgrade their policies.
“Australians should be checking the benefit levels that apply to their policy and whether they are coming close to the limits.
“You might be forgetting about certain services that you are entitled to or paying too much for cover you don’t need. If you aren’t sure what sort of cover you really need, jump online and compare.”
State by state:
– Queenslanders are the most likely to know the status of their extras policies, with 39% keeping track of their claims. They also have used their extras policies the most of any state since the start of the year, currently at 3.64 occasions since January 2016.
– New South Wales residents have used their extras 3.44 times on average since January 2016, second only to Queensland.
– At the other end of the spectrum is Tasmania, where only one in five adults know how much they have left to claim on extras before they hit their limit, and the average Tasmanian has only used their extras 1.75 times this year.
Generation break down:
– Generation Y were by far the most savvy when it came to their extras policies, with almost half (46%) keeping them in check.
– Baby boomers were in the dark, with almost 3 in 4 (74%) having no idea what their extras usage was.
– However despite this, they have claimed their extras the most of the generations, with an average of 3.41 times.
– On average, Gen X has used their extras cover the least with only 3.21 times since January 2016.
– 69% of Gen X doesn’t keep track of how much they have left to claim on extras.
Finder.com.au tips to pay less for extras cover:
– Look into the excess you pay in the event of a claim.
– Check what you’re paying for. If treatments are included in your extras that you’ll never need, consider switching policies.
– Compare different policy options. There are hundreds of different policies available with varying premiums.
– It may be worth taking out hospital cover with one insurer and extras cover with another to save further.
For further information
The information in this release is accurate as of the date published, but rates, fees and other product features may have changed. Please see updated product information on finder.com.au's review pages for the current correct values.
More than 3 million Australians turn to finder.com.au every month to help them save money, time, and make important life choices. We compare virtually everything from credit cards, phone plans, health insurance, travel deals and much more.
Our free service is 100% independently-owned by two Australians Fred Schebesta and Frank Restuccia. Since launching in 2006, we’ve helped our users make more than 17 million decisions.
We continue to expand and launch around the globe, and now operate in the United States and United Kingdom.