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With the upcoming private health insurance premium increase, you may be thinking about the advantages and disadvantages of switching your health insurance. Alternatively, there has been a significant change in your circumstances, and your current cover no longer meets your requirements. Whatever your reason for changing, it’s a good idea to consider all of the factors before you switch.
Key facts
- Benefits of switching your insurance include new member discounts, lower premiums and better coverage.
- Drawbacks include the loss of loyalty rewards, not being covered for the same benefits included in your old policy and losing access to your previous insurer’s provider network.
- The best time to make health insurance changes is in peak periods in March and June.
- You won’t need to re-serve waiting periods if your new policy offers the same cover level or lower.
Advantages & Disadvantages of changing your health cover
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Preparing to change insurers
- Examine your current policy: If you’ve maintained your current cover for 10 years or longer, you may find that you are currently paying less for your insurance than any other available policies. However, you may find that you need to change your policy if you want to add benefits or additional members.
- Consider your Extras: You generally aren’t required to choose the same fund for your Hospital and Extras policies. So, you may find that it is beneficial to compare Extras from various insurers to find the best options for your requirements. However, you may want to find out about relevant waiting periods on your new Extras policy as the portability guarantee typically does not apply to Extras policies.
- Think about your future needs: Although it’s essential to think about your current requirements when preparing to change to a different insurer, it’s equally important to consider your future requirements. For instance, if you plan on starting a family, you may want to look for a policy that offers pregnancy and birth benefits.
When is the best time to switch?
Although there is no right time to change your health fund, there are a few times each year when you may find a better deal than at other times. The first period is in March before the annual premium increase on 1 April. The second peak period is June before the LHC loading kicks in for 31-year-olds on 1 July. If you move to a different health fund at this time, you may be able to take advantage of several discounts and promotions.
A step-by-step guide to switching insurers
- Compare quotes: Evaluate several quotes from leading health insurance companies and then compare these to find a policy best suited to your requirements.
- Apply for cover: Send your application to the new insurer and ensure that you’ve paid all premiums on your old policy. You may also want to inform your new fund that you’d like your new cover to start as soon as your old policy lapses.
- Get your documentation together: You’ll generally receive a clearance or transfer certificate from your old insurer. This document outlines your current coverage and should be finalised in the first 14 days after you’ve submitted the request.
- Cancel your current cover: Inform your insurer of your intention to cancel your cover. They’ll end your cover and will generally refund any premiums you’ve paid in advance.
- Begin your new cover: Once you reach the new commencement date on your policy, your coverage will begin, and you’ll be covered for the benefits laid out in your documents. At this time, the fund will also begin deducting premiums from your bank account.
What happens to your waiting periods when you switch?
This generally depends on your current policy and the type of policy you’ve applied for. If your new policy is of a similar level or lower than your current policy, you generally won’t need to complete waiting periods again. However, if you opt for a higher level of cover, you’ll need to serve the waiting periods outlined in your policy documents. If your switching Extras cover, you’ll need to serve all waiting periods again.
Frequently asked questions and answers
Can you change your health insurance policy at any time?
Generally, there are no restrictions on when you’re allowed to change insurance providers. If you find that your current health fund no longer serves your needs, it is your right to change to a fund that meets your requirements. However, you have the responsibility to compare quotes from leading health funds to find a policy that suits you.Can you transfer your health insurance to another company?
Yes, you’ll typically be able to transfer your health policy if you choose a policy that offers the same level of cover or lower. Generally, your previous insurer will handle the transfer by sending your policy details to your new fund. Or, you could handle the transfer by yourself.Can you have two health insurance policies?
Yes, there are no rules that state you need to have Hospital and Extras cover from the same insurer. It’s generally a good idea to compare Hospital and Extras policies from leading insurers to find the right option to suit your requirements.Will you get a good deal if you switch after the premium increase?
Yes, you may still be able to find health insurance for an affordable price after premiums increase on 1 April. However, most funds offer their best deals in the month before the increase. If you are thinking about reviewing your cover, the best time is the month before the premiums are set to rise.Should you switch your insurer because of the premium increase?
This typically depends on your circumstances. If the premium increase means that you’ll no longer afford your premiums, it might be a good idea to review your coverage. Compare quotes from leading insurers to find the right policy to suit your requirements.
