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Keeping your cover in check

They say life’s a marathon, not a sprint. And in many ways that’s true. Just like all the other life admin we need to get across, paying close attention to your health cover can have you on the right track to making sure you’re always protected when you need it.

Checking in on your cover from time to time is the best way to make sure you’re getting the best value from your health cover.

A little bit of effort can really pay off. And, you’ll have the added security of knowing you’re covered for all the things you need (and not for things you don’t).

So, why do I need to review my cover?

Things change. And, just like anything that’s worthwhile, your health cover should change with you. That’s why ‘setting and forgetting’ can be a mistake you’ll want to avoid.

Your cover should keep up with your changing lifestyle and health needs, so you’re confident you’re covered for everything you need, when you need it.

Regularly assessing your cover will help you keep yourself and those you love protected. Because that’s what it’s all about.

It’s a good idea to make your health cover audit an annual event. You can always review at the end of each financial year … or at the start of every new year. Whatever suits you best!

Here are a few reasons why it pays to take a look at your cover often:

To be sure your cover suits your needs (and your family’s)

Whether you’re just starting off as a couple, there’s a new baby on the way, the kids are getting older, the kids are now adults (remember we can help you cover them up to age 31!), or you’re now ‘empty nesters’, every life stage is a good opportunity to check in on your cover.

You’ll need different things from your health cover as you go on life’s journey; different things will be important to you depending on your lifestyle, your age, your income and who’s being covered.

But remember, we’re always here to help you make the changes you need.

If you’re hitting your 30s

Hospital cover really comes into play once you reach your 30s. Even if you’ve been happy with Extras cover in your 20s, there’ll be a few reasons to consider taking up Hospital cover once you hit 30.

Generally (but not for everyone) this is around the time you start to settle down in life. Get a partner, think about having kids and making a family.

If that’s a priority for you, you’ll want to make sure you’ve got a cover that includes pregnancy and birth.

You’ll also want to be sure your growing family are covered for all they need with a suitable level of cover that protects you all.

But even if that’s not you, there are a couple of things to know about why it’s to your advantage to get hospital cover before you turn 31. That’s because of a government incentive called the Lifetime Health Cover loading (LHC).

If you take out hospital cover earlier in life (and keep it), you’ll avoid paying the LHC loading.

LHC is an incentive designed to encourage people to take out private hospital cover earlier in life (shortly after you turn 31). The rules calculate the specific date (generally it will be 1 July after you turn 31) you need to have Hospital cover to avoid LHC.

From 1 July following your 31st birthday, you’ll need to pay a 2% LHC loading on top of the base premium for each year you haven’t had hospital cover since turning 30 (up to 70%). The good news is you don’t have to pay LHC forever – it’ll be removed from your premiums after 10 continuous years.

LHC loading only applies to hospital cover, so you won’t need to pay it on any Extras or Ambulance cover. (It pays to know there’s no government rebate for any LHC loading portion you pay.)

And, if you're already over 31, taking out private hospital cover may help you avoid paying any extra loading as you get older. The longer you wait to take out private hospital cover after turning 31, the higher your LHC loading.

A new job or a change in income

If your income changes, it’s always a good time to check in on your health cover. It may be that you temporarily need to change things to accommodate an unexpected redundancy or a change in circumstance. We’re here for you through these pitfalls and can help adjust your cover when things are unexpectedly tough.

It may also be that you’ve had a promotion, or a new job and your income has increased. That’s the time when you really want to be sure you avoid paying extra by protecting yourself against the Medicare Levy Surcharge, commonly referred to as the MLS.

The MLS was created to take the pressure off the public health system by encouraging higher earning Aussies to take out private hospital cover.

If you earn over a certain amount ($93,000 a year for singles and $186,000 for couples) and don’t have private hospital cover, you’ll have to pay an additional amount towards the Medicare levy. And the more you earn, the more you’ll need to pay (up to 1.5 per cent of your taxable income). That’s the MLS and it is calculated when you submit your annual tax return.

While we’re here to help you adjust your cover to suit your needs, it’s best to get any financial advice from a registered tax agent or the Australian Tax Office (ATO).

The ATO has some great resources on their website where you can find out more.

You’re getting older

As we get on in years, there are even more reasons to make sure our health cover is doing the hard yards.

The older you get, the more you’ll need to think about higher levels of cover and making sure you’re protected should the worst happen.

While an entry level cover may suit you during your 20s and 30s, it’s worth looking at a higher level of cover in your 40s and 50s – just to be sure you’re covered for things like cardiac treatment and joint replacement.

Our exposure to chronic conditions increases as we age, so it’s important both our Hospital and Extras cover can do the heavy lifting when it comes to protecting our future wellbeing.

And this is probably a time when your kids (if you have them) are getting older. So, it’s a good checkpoint to make sure your Extras are working for the whole family.