Should you get excited about health insurance incentives?
All that glitters is not gold: Why you might want to look past health insurance deals.
While we all love finding a good deal, it's important not to get sucked in by gimmicks. According to a recent survey, 41% of Australians have taken advantage of bonus incentives from their health fund.
At this time of year, many funds are vying for your business and offering deals and discounts such as gift cards and premium waivers in order to win your business. And that's all well and good – looking for a fund offering something extra might be a good tiebreaker – but it should not solely be the reason you choose a fund. It is important to do your research before taking out cover.
For instance, if you claim on extras regularly, make sure that the policy you're switching to provides the same, if not better, level of cover. You should also review how much your fund's premiums have gone up over time to make sure you're not making the switch to a fund that is underperforming.
You should also look at how well a fund performs in regards to its member retention. If a fund is losing members, it may be a bad sign. Another strong indicator is how much of its member contributions a fund returns in the form of benefits.
Still thinking about switching funds in March?
If you can afford to do so, paying your premiums annually before the rate hike is a great way to save. Not only will you benefit from rate protection but you may also be able to save up to a further 4% if you switch to a fund offering an annual payment discount. Surprisingly, only 20.4% of Australians paid their premiums upfront, with 15% paying the full year's premiums upfront and 5.4% paying their premiums six months in advance.
Men (24.4%) were more likely than women (16.3%) to pay their premiums upfront. Worryingly, 5.2% of Australians didn't know how regularly they paid their premiums and 22% of Australians have been with their fund so long that they can't remember when they got cover.
This lackadaisical attitude towards health insurance seems to be a common theme, with the average Australian staying with the same health fund for an average of 11.8 years. This is troubling when you consider that health insurance premiums have gone up almost 50% since 2010, outpacing wage growth or CPI.
Make sure you get the right health insurance when if you're planning to switch. Compare policies from 35 funds today to make sure you're getting the cover that is suited to you.