Do you know how to tell if your extras cover is worth it?
If you have private health insurance with extras cover, you’ve probably wondered at some point whether it’s worth the expense.
The answer will be different for everyone.
But there are two big questions you need to ask yourself to find the answer.
Are you using it to your advantage?
Before you can know if it’s worth the cost, you need to ask yourself whether you’re using it properly.
Basically – are you getting your monies worth?
Here’s how to make sure you’re getting your monies worth.
Know when your annual limits reset
Most annual limits for claiming back on extras services reset annually on 1 January.
Unused limits don’t carry over so you should try to use up as much as you can before the end of the year.
The best way to ensure this doesn’t happen is to get to know your policy.
Most people don’t know what they’re covered for – they just have cover for ‘peace of mind.’
But you need to know what you’re covered for, what the limits are and make sure you’re using the cover you’re paying for!
Are you visiting a preferred or members’ choice provider?
If you’re not you are probably not maximising the benefits available to you through your extras cover.
These providers are the ones that provide the biggest percentage rebates for the services you are likely covered for like optical, dental, massage and physiotherapy.
Members’ Choice providers also have fixed pricing for some treatments, so you’ll always know the costs up front so can save further that way.
Are you utilising the freebies, discounts and other perks they offer?
For example, we are with Medibank Private.
As part of our cover, we get a free annual dental check-up for each person with 100% back on an annual dental check-up (excluding x-rays) at a Members’ Choice dentist.
Also, does your health insurer have a relationship with any rewards programs like Fly Buys or any of the Frequent Flyer programs?
If they do, make sure you are earning points for premiums paid each year. This goes not just for extras cover but hospital cover to.
Think about it this way, if you are paying $3,500 per annum in private health insurance for your family, on a 1:1 earn rate – that is 3,500 rewards points per annum you are missing out on.
I’ll let you do the maths on what that’s worth to you.
Question # 2
Do the benefits outweigh the cost?
If you’re doing everything possible to maximize the return from your insurer on your extras cover – then the next step is to work out if the benefits you receive are worth the expense.
This is the calculation most people struggle with.
Here’s what you need to do.
Contact your health insurer and ask for an annual claims statement. This is a statement of all the claims you have made on your policy and the claim amounts that have been paid to you.
If you have an extras only policy then you will be able to do a direct comparison between what you pay in premiums and what you have received in benefit or cash back.
If you’re paying more than what you’re getting back it might be time to revisit Question # 1 to see whether you’re making the most of your cover.
If you’re doing everything right there, then it might be time to see whether you can obtain comparable cover with another insurer for less OR decide whether the cover is worth it for your family.
With combined hospital and extras cover then you may need to get a quote with your insurer for a standalone extras policy so that you can compare extras claims with an estimate of extras premiums you would pay.
If you have private hospital cover, there are quite a few things to consider. And the question and calculation for whether private hospital cover is worth it is quite different.
Either way it’s a big expense for most families so it’s worth doing the numbers on whether the benefit is really there for you.
It pays to pay attention to your money!