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A Guide to the Lifetime Health Cover Loading

If you’re an Australian citizen researching private health insurance, you’ve probably heard of Lifetime Health Cover loading (LHC). You’ll also know that this concept that unique to private health insurance in Australia, and that it’s been designed to encourage you to take out and maintain private health insurance as early as possible.
Fact Checked

Updated: 22 May 2024

At the crux of it, LHC loading can be seen as a kind of financial penalty. However, you’ll only receive the penalty if you haven’t purchased private health insurance by turning 31 years old. Although it may sound scary, this ‘penalty’ is a simple fee. The later you take out private health insurance, the higher the LHC Loading fee is added to your health insurance premiums.

Key facts

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Understanding Lifetime Health Cover Loading

Since governmental healthcare is free in Australia, the resources can be strained. As a result, the Australian government created Lifetime Health Cover Loading to incentivise individuals to get private health insurance by the time they’re 31.

Individuals who comply with the LHC Loading rules have access to high-quality healthcare from a young age, and they avoid incurring any additional financial penalties, such as the LHC Loading penalty or the higher cost of premiums for any unchecked health conditions that could get more severe as you age. By avoiding LHC loading, you can lock in a lower premium rate and enjoy a higher standard of health and healthcare as soon as possible.

Calculating Lifetime Health Cover (LHC) Loading

In Australia, the Lifetime Health Cover loading rate is calculated very specifically. It’s based on your age at the time you take out private hospital cover and the number of years you’ve held continuous cover since the age of 31.

Suppose you do not have hospital cover by 1 July following your 31st birthday and choose to take private health insurance coverage out later in life. In that case, a 2% loading is added to your health insurance coverage premium each year after that.

Benefits of Taking Out Cover Early

The main advantage of taking out cover early in your 30s is that you avoid the LHC deadline and, thus, its related penalties. As a result, you safeguard your premium rates for when you age – so that you don’t have to pay the 2% year increase when you do eventually take out private health insurance.

Buying private health insurance before the LHC deadline also ensures continued health coverage. It can cover pre-existing conditions, cover accidents, and even boost your quality of health – making you less of a health risk in the long run.

Consequences of Delaying Cover

We don’t recommend delaying private health insurance. Not having access to private health insurance can mean you may have longer waiting times should you require certain treatments and services from a public hospital. You also increase the waiting times for people who cannot afford private health insurance, while putting pressure on the Australian public healthcare system overall.

And, of course,  a significant drawback of delaying private health insurance is the financial burden imposed by LHC loading penalties. The loading percentage increases by 2% for each year an individual is over 30 when they first purchase private health insurance, up to a maximum of 70%. This can result in higher premiums, making private health insurance less affordable while increasing your financial burden as you age. 

Exceptions and Exemptions to LHC Loading

Lifetime Health Cover loading exemptions have been designed to offer flexibility while recognising that certain situations could have prevented you from taking out private health insurance before the required age. Exemptions from LHC loading are subject to specific criteria, and you’ll have to provide evidence to support your exemption claim. 

Strategies for Managing Lifetime Health Cover Loading

There are strategies you could take to reduce or avoid the Lifetime Health Cover (LHC) loading fees. The most obvious choice is to purchase private health insurance early. You could also maintain continuous coverage and adjust your level of coverage or policy based on your fluctuating needs and circumstances. 

Other examples include:

Frequently Asked Questions and Answers

Lifetime Health Cover (LHC) loading is a government initiative created to encourage Australian citizens to invest in private hospital cover as early as possible (ideally before age 31). It can be summarized as a fee, calculated according to the age you were when you first bought private health insurance and how many years you’ve gone without it since then.
The LHC loading is calculated based on your age and LHC loading period. So, the loading percentage increases by 2% for every year the individual is over 30 when they first take out private health insurance, up to a maximum of 70%. You may be wondering how long lifetime health cover loading lasts. LHC loading doesn’t last forever – once you’ve had private health insurance for ten years, the loading is removed.
The LHC loading is not considered a penalty but an additional cost applied to your private health insurance premium, which can get exceptionally expensive. If you require hospital treatment and do not have private hospital coverage, you could experience longer waiting times and worsen your condition. If you decide to opt for private healthcare without cover, you could be liable to pay very high out-of-pocket fees.
Yes, there are exemptions to the Lifetime Health Cover (LHC) loading for hospital health cover in Australia. For example, base-day age exemptions exist for those who take out private hospital cover before 1 July following their 31st birthday. People who migrate to Australia after the age of 31 are also exempt from LHC loading for the period that they were out of the country. There are also specific situations where individuals may be eligible for exemptions. Still, there is a process to adhere to in all cases, and you’ll have to fill out a Lifetime Health Cover loading exemption form.
The most effective way to avoid LHC loading is to take out private hospital cover before your 31st birthday. And if you have already missed the deadline and are subject to LHC loading, you can reduce the loading by maintaining continuous private hospital cover.


Megan has extensive experience writing about health and life insurance in Australia. Megan has a special interest in health and wellness. She relies on her background in counselling psychology to convey the latest findings in a manner that is most beneficial to ComparingExperts readers. In every article she writes, Megan aims to uphold the standards of the Private Health Insurance Intermediaries Association (PHIAA) which ComparingExpert is part of.

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