How to tailor your health insurance

Tailoring your private health insurance can help you get all the cover you and your family need – and none you don’t.

Health insurance is definitely not a “one size fits all” product. Cover needs can vary greatly depending on an extensive range of factors, including everything from whether you’re single or have a family to your budget or your life stage.

That’s why it’s important that you tailor your health insurance policy to suit your unique cover needs. Read on to find out how you can do exactly that.

Compare policies from 30+ Australian health funds

Can you tailor your health insurance policy?

Yes, you can, and it’s actually quite simple to mould your health insurance policy into something that suits you. Tailoring a policy simply means getting the private health cover that is suited to your personal situation.

For example, if you’re a 21-year-old male who is fit and healthy, you most likely won’t need comprehensive hospital cover. High-level policies offer benefits for an extensive range of services, many of which you probably aren’t going to need any time soon, such as heart surgery, hip replacements and pregnancy services. So instead of paying for cover you don’t need, you can save money by choosing a lower level of cover suited to someone who is young and healthy.

What are the benefits of reviewing your cover options?

Health insurance policies come in all shapes and sizes. Not only are there different levels of cover available, ranging from basic, medium and top cover, but there are also different types of cover to choose from.

There are two main types of health insurance:

  • Hospital cover. This covers inpatient hospital treatment and services for which Medicare pays a benefit.
  • Extras cover. This helps you cover some or all of the costs of treatment provided by ancillary health service providers, including dental, optical, physio and more.

When choosing a health insurance policy, ask yourself whether you need hospital cover, extras cover or both. Your answer to this question will vary depending on a number of factors, including the following:

  • Your life stage. The amount and type of cover you need changes as you age. For example, while you may not need much cover when you’re young and healthy, you may require more cover as you grow older. The range of benefits (such as dental) that you need will also change as your life circumstances change, such as when you have children of your own. When you reach retirement age, you may find that you need high-level cover to meet your increased health care needs. This is why it’s important to continually review your cover options and make sure that your health insurance cover is adequate for your changing circumstances.
  • Your budget. The higher the level of cover you select, the more it will cost you. For example, hospital cover on its own will be more affordable than a combined hospital and extras policy. With this in mind, how much you can afford and how much you are willing to pay for health insurance will influence the policy you select.
  • How much cover you want. For some people, having hospital and extras cover in place provides peace of mind that they will always be able to access the health care they want or need. For others, health insurance is more about ensuring that you are protected in a handful of worst-case scenarios and that whatever cover you purchase won’t break the bank.

Can you buy hospital and extras from two different funds?

There’s a common misconception that if you choose to take out both hospital and extras cover, both of these policies must be with the same insurer. But this is not the case. You’re free to mix and match hospital and extras policies across entirely different health funds to find the right cover for your needs.

The main benefit of this approach is that you’re not limited to the policies provided by any one health fund. If Fund A offers the perfect hospital cover for your needs but you’re disappointed in its extras covers, there’s no reason you can’t take out hospital cover from Fund A but then find an extras policy from Fund B.

If you’re interested in mixing and matching hospital and extras cover across health funds, the health insurance comparison tool can help you combine hospital and extras cover from 35 leading Australian health funds.

How can using an adviser help?

Health insurance can be a confusing and complicated topic and choosing the right policy can be difficult. So if you don’t have the time or the patience to wrap your head around all the different policies and technical jargon, you might want to consider asking an insurance broker or adviser for help.

Brokers are insurance experts that can help you tailor a policy to your needs. After taking the time to assess your lifestyle, financial situation and health status, a broker will be able to help you find health insurance cover that suits you. They can present you with a range of potential cover options, explain any terms or answer any questions you may have and help ensure that you and your loved ones have access to the health insurance protection you need.

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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