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Step-by-step guide to transferring your health insurance

Your three step guide to switching your health insurance and finding better cover.

In April each year, Australian health insurers put their premiums up, which makes it the perfect time to review your policy and decide whether the cover you have is still suitable for your needs.

If it’s not up to scratch, the good news is that it’s a piece of cake to transfer your membership from one health fund to another. Here’s what you need to do to switch health insurers.

Compare your health insurance options

Step 1: Review your cover

Your circumstances are changing all the time. For example, if you’re planning to start a family, your needs will be different from when you were young and single.

This is why you should regularly review your health cover to determine whether it offers the protection you need. The annual private health insurance premium rise in April is the best time to do this, as not only can you compare cover features with those of other health funds, but you can also form a clear picture of which fund offers the best value for money.

Regardless of whether you want better cover or more affordable cover, make sure you compare the cover options from multiple health funds. Get quotes from each fund you’re considering and check out the benefits, cover limits and exclusions before deciding whether it’s time to switch.

Step 2: What methods of switching can I choose from?

It’s quick and easy to switch health funds. Depending on your fund there will usually be three options available:

  • Online. You can fill out all the necessary paperwork to switch health funds online. Your new health fund will provide clear instructions about exactly what you need to do.
  • Over the phone. You can phone your old health fund to cancel your existing membership and call your new health fund to become a new member. Make sure you arrange it so that your current membership ends on the same day that your new membership starts.
  • In person. If your health fund has a branch or retail centre near you, you can drop in to fill out the necessary paperwork and transfer your membership over from another fund.

Step 3: Apply for cover

Applying for cover with a new health fund and switching health insurers is simple. All you have to do is:

  1. Get a quote for cover from your new health fund.
  2. Apply for cover online or over the phone.
  3. You’ll need to obtain a clearance certificate from your old fund. This certificate, also called a clearance letter or transfer certificate, provides a record of your health insurance cover, including the type and level of cover held and when your policy commenced and finished. You can either contact your old health fund yourself or authorise your new fund to take care of this step on your behalf.
  4. Cancel cover with your old fund, including any direct debits you have set up to pay premiums.
  5. Notify your new fund so that cover can start.
  6. Remember to check your bank statement to make sure your new cover has begun and that you aren’t still paying premiums to your old fund.

Considerations before you switch

There are several factors you should consider before deciding to switch health funds, including:

  • Waiting periods. If you transfer to a new health fund and take out an equivalent or lower level of cover than you held with your previous fund, you will not have to re-serve any waiting periods. However, if you switch to a policy that offers a higher level of cover or a lower excess, you’ll need to serve waiting periods for any of the services not covered by your previous fund.
  • Cover limits. Check the fine print provided by your new health fund to make sure you’re aware of all benefit limits that apply. As well as individual benefit limits, keep an eye out for any lifetime limits on specific services.
  • Clearance certificates. Australian health funds have up to 30 days to issue clearance certificates, so be prepared for the fact that switching might take some time.
  • Loyalty bonuses. Some funds pay loyalty bonuses to long-term members, which may result in cheaper premiums. You will usually lose your bonus if you switch to a new health fund.
  • No change to government rebates. Switching health funds will not have any impact on your Lifetime Health Cover status, so you don’t have to worry about an extra premium loading. If your income remains unchanged, you should also still be entitled to any tax time rebates you have previously received.
  • Discounts. How you pay your premium can have an impact on how much cover costs. Some health funds will offer cheaper premiums if you set up a direct debit or if you pay premiums annually rather than monthly.

Compare your health insurance options online or with help from an adviser

Picture: Shutterstock

Tim Falk

A freelance writer with a passion for the written word, Tim loves helping Australians find the right home loans and savings accounts. When he's not chained to a computer, Tim can usually be found exploring the great outdoors.

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