Overview

Most young adults dream of the day they can be financially independent from their parents. But health insurance can be a real drain on their bank balance and it can be easy for twentysomethings to decide they can do without cover.

The good news is that many health funds let adult children stay on the family policy well into their twenties. 

It varies from insurer to insurer, but it can be a very cost effective solution for families, especially when it comes to saving money on items like dentist visits and new glasses and contact lenses.

The federal government has now raised the age limit to 31. So does it make financial sense for a young adult to stay covered by their parents’ policy? Here's all you need to know.

Key Points

  • Young adults can stay on a family policy until they’re 31 but very few health funds offer this.

  • The age limit is a guideline from the government - cut-off ages vary between health insurers. 

  • Full-time students in their 20s can typically stay on a family policy at no extra cost.

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What’s the age limit for a young adult to remain on their family’s insurance policy? 

This varies from insurer to insurer.

The majority of funds allow adult children to stay on a policy until they’re 21, but some funds have a limit as low as 18 while others have a higher limit, so it can pay to check.

Many funds do offer the option to keep non-student children on the family policy over the age of 21 but will charge a fee to do so.

Full-time students can currently stay on their parents’ policy until they’re 25, provided they’re not married or in a de facto relationship.

Do all health insurers allow children to stay on a family policy until they turn 31?

No.

The 2020 federal budget allowed insurers to extend the age for coverage but didn’t make it compulsory and most insurers have opted not to extend the age limit for adult children to 31.

At the time of writing, none of Australia’s big health funds have raised their age limits to 31, although that may change in the future.

Compare Club’s specialists can help find policies with higher age limits, if you’re keen to keep your children covered when they reach adulthood.

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What happens when my child turns 31?

This is the age when the government’s Lifetime Health Cover (LHC) loading kicks in.

Anyone over 31 will accrue a two percent surcharge on their hospital cover premium for every year that they don’t have health cover, all of which will kick in as soon as they do take out a policy.

The maximum this surcharge can rise to is 70 percent by the age of 65. This surcharge or loading applies for 10 years of membership.

LHC is designed to encourage younger Australians to take our private health cover and ease the burden on the public system. 

By raising the age limit to 31, the government aligned the cut-off age from a family membership with the beginning of the Lifetime Health Cover loading period.

Can people aged 18 and above still get their own health insurance policy?

Yes.

Anyone over the age of 18 can choose to come off their family policy and take out their own health insurance.

If that’s you, you might want to read our guide to health insurance for young singles.

Should I keep my kids on my family policy or ask them to get their own cover?

It depends. Choosing whether to keep your adult children on your policy really comes down to what you can afford and whether it makes more sense for children to take out their own policy

It could put the financial pressure back on the Bank of Mum and Dad, but if you’d be contributing to the cost of their dental treatment or other health expenses, then it may make more sense for all of you to sit on one policy.

Essentially, the easiest way to work out whether it’s most cost-effective to have a family policy or a young singles policy is to compare. 

It can be quite time consuming to go back and forth between funds. This is where the team at Compare Club can help. 

We’ll compare policies from a panel of Australia’s leading insurers to find out the right combination of policies for you and your family.

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Do young adults get any discounts on their health insurance?

Many health insurance providers offer incentives in the form of “age-based discounts” for young adults who choose to take out their own policy. 

This can be as much as 10% discount on yearly premiums for anybody aged between 18 and 25.

Can my child remain on my policy as an adult if they have a disability?

There’s no age limit for adult children with a disability to remain on their parents’ policy. This allows them to access their family’s cover indefinitely. 

What if my child is a full-time student?

Before 1 April 2021, many funds would let adult children stay on a family policy until they were 25 if they were still in full-time education and not married or in a de facto relationship.

That’s still the case for most of Australia’s health funds.

The new changes mean, in theory, all adult children could be covered up to 31.

But, as we’ve already noted, not all insurers are choosing to raise their limits to 31.

That means different funds may have different age limits for non-students.

As ever, it’s worth checking and comparing.

And if it gets confusing, just get in touch and we can do the hard work for you.

Can I cover my adult child’s partner on my health insurance?

The short answer here is no.

You may be fond of your child’s other half, but health funds will only cover adult children when the policyholder is their parent or permanent legal guardian.

If your child gets married or is in a de facto relationship, they’ll also need to take out their own policy, even if they’re only 18.

At this stage, it’s worth considering if it’s cheaper to get a couples policy or two separate singles cover policies.

How much will it cost to keep my child on my policy once they turn 18?

This varies from insurer to insurer.

For example, HCF lets children stay on the original family policy if they are single and studying full time up to a day before their 25th birthday.

If they aren’t studying full time, they are able to stay on your policy with Extended Family Cover that costs an extra 25% of the current family premium.

BUPA on the other hand, lets children stay on the original family policy if they’re between the ages of 21 and 25 and studying at university, TAFE or other institutions excluding apprenticeships.

They also have to be single and not living in a de facto relationship.

If you’re over 21 and not studying full time, BUPA offers Family Plus, but this product isn’t available on all levels of cover.

This is something Compare Club’s specialists can help with.

We’ll look into what you need cover for and whether it’s more cost effective to take out a family policy or to move to separate policies.

What’s the best family health insurance if I have adult children?

The best way to answer this is to compare policies. It’s where Compare Club can help - we’ll help you find a premium that fits your budget and needs from our panel of trusted insurers. 

Plus, if your kids are no longer the little angels they used to be, it’s worth comparing a wide range of policies to understand the best value option for them (and you!) in the long run.

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This guide is opinion only and should not be taken as medical or financial advice. Check with a financial professional before making any decisions.