What to look out for at different ages on your health insurance

Fact Checked
Updated 20/02/2024
What to look out for at different ages on your health insurance

The cover you need at 21 is very different to want you need at 68. Your insurance should change at every life stage.

Time to read : 4 Minutes

When it comes to Australians not having the right type of insurance, we often hear about the staggering majority of households (83%) that are underinsured, or the eye-watering costs ($600 million every year) to taxpayers due to death and TPD (Total and Permanent Disability) underinsurance.

But there’s another problem: too many people on the wrong level of health insurance.

With interest rates and inflation surging this year and expected to remain high for the foreseeable future, it’s time you reviewed your health policy to find out whether it really suits your current life stage.

Ask yourself: “What do I really need cover for right now?”

It’s true that the earlier you take out health insurance the cheaper it is, so it really does pay to get covered early in life. But what’s often forgotten is that your needs change over the course of your life, so your health cover should reflect that.

  • Taking out heath insurance at a young age can save you from the Lifetime Health Cover Loading charge.

  • Having a basic policy in your 20s is common, but what happens when you want to start a family in your 30s and don’t have obstetrics cover?

  • You could be missing out on up to $5,000 in savings if you don't know that the government upped the age limit for adult children to stay on their family's health cover until they're 31 years old.

  • Most of the major insurers are raising their premiums in October or November this year, if they haven't already. Major funds account for around 75% of all health insurance policies in Australia, so if you don’t review your policy today you could be paying even more for cover that’s not ideal for where you're at in life right now.

  • Don’t spend hundreds on your premiums for services you don't need – like expensive pregnancy and obstetrics cover if you're not having (any more) kids.

Be careful: Just like not having a high enough level of cover can put you in financial distress with unexpected medical costs, the reverse is also true. How much are you spending every month for services you don't use, like hip replacements, or kids' orthodontics.

Unless you have a cash tree, you’ll want to do your sums

The cost of living is only going up, which means most Aussies are looking for ways to save on everyday expenses.

  • If you're spending hundreds of dollars on your premiums every month, it’s worth researching whether your current policy is still good value for you.

  • If it’s not, look into comparison shopping for more appropriate cover for your life stage. Here are some considerations depending on your age:

In your 20s: When you’re young and healthy you might not think you need private health insurance, but getting it early can protect you against the unexpected while also helping you avoid the Lifetime Health Cover (LHC) loading charge when you turn 31.

Starting a family: It’s at this stage of your life where Gold cover is probably most important, especially if you plan on having kids. Pregnancy and obstetrics services fall under this top level of health cover.

Mature couples: After the kids have flown the coop, you may be able to drop down a level of cover so your premiums aren’t as expensive – while still getting essential services for your life stage such as reconstructive surgery, dental surgery, heart and more (on Silver policies and above).

Seniors: Both Silver and Gold policies include a range of services to suit older Australians approaching – or already enjoying – retirement. And if you find you’re not using anything on your extras cover, look into how much you could save by removing it from your policy.

That awful saying rings true: It’s only when you need cover that you wish you had it

Taking out health insurance is a bit like planning for the worst-possible day of your life.

It’s no fun to actually think about, but if that bad day ever arrives, you’ll be glad you did. Think about how much peace of mind you’ll get knowing you're on the perfect level of health cover for your current life stage. Here are some of the top benefits:

⏲️ Shorter waiting times compared to being in the public system.

🔒 Access to private rooms during hospital stays.

💲Claim a rebate on health services not covered by Medicare (e.g. dental, optical, physiotherapy).

👩‍⚕️Your choice of doctor or surgeon.

💰Depending on your income, you may not have to pay the Medicare Levy Surcharge.

🐖 Big savings over the long term when you stay insured.

The bottom line: Be savings-smart

No one goes out of their way to spend money on things they don’t use.

  • But if you took the time to audit your lifestyle, you’ll probably find you're wasting money on things you’d completely forgotten about.

  • Hello, 7 streaming subscription services! Do you actually use all of them, or could you cancel a few this month and switch over next month? These extra savings may help you afford a more appropriate level of health cover.

  • Alternatively, if you find you are on a much higher level of cover than you need, make the switch today! You shouldn’t be wasting your money on anything you don’t use.

Read more:

Health insurance premiums are about to jump AGAIN – this is what you can do about it

How does anyone afford dental treatment?

Is bulk-billing going the way of the dodo?

The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.