Health Insurance

Five things to know about your health cover

If you've had your health insurance for a while, now may be a good time for a recap of how it all works. So, here's health insurance in a nutshell.

The small print is important

With health cover, knowing and understanding your insurance contract is key. The small print contains all the answers, including critical information about what your policy does and doesn't cover.

For example, you may have an 'exclusion' on your policy, depending on your medical history at the time you applied for cover. That means that your health insurance will not provide coverage for any claims related to that condition. However, not all exclusions are forever! Depending on how serious your condition is, you may be able to ask to remove the exclusion in the future.

You can find more information on health insurance exclusions here. And of course, if you'd like to take a closer look at your policy, our friendly team of insurance advisers are here to answer any questions you may have. Click here to contact us.

How does the excess work?

When you set up your health insurance policy, you had the option to select a certain 'excess'. This is the portion of each claim that you agree to pay: if your excess is $250, and the hospital bill is $5,000, you'll pay $250 and your insurer will cover the rest of it ($4,750).

The larger the excess you choose, the lower your relative insurance premiums are. So if you have a rainy day fund to tap into, you may want to choose the highest excess you can afford to pay, to keep your ongoing insurance costs down.

Do you already have cover and would like to increase or reduce your existing excess? To raise your excess, you'll just need to notify your insurer, whereas if you'd like to lower your excess, you may be required to complete a new application and assessment by the insurer. Get in touch anytime if you need any assistance with this: we're here to help.

What happens at claim time?

For most of the large claims, health insurers usually require a pre-approval. Getting a pre-approval means you know the claim has already been approved and the insurer will pay the health provider directly and you won't have to advance any money.

Once again, our team at LifeDirect are here to help. If you think a claim might be needed, please contact us straight away. We will then contact your insurer and get the claims process underway.

Different insurance plans have different claim limits, which is the maximum they agree to pay if you were to claim on a procedure. Most surgical limits are high, in the hundreds of thousands, but it's worth checking what your cover entails: high claim limits allow you to easily cover procedures or other costs. Over time, if medical costs increase, your insurer may also adjust their claim limits.

Your premiums will increase as you get older

If you've had your health cover for a while, you may have noticed an increase in your premiums. This is because Health insurance premiums are affected by age and by changes in the cost of healthcare. While the increase rate varies, it's a good idea to budget for an annual rise of 10 to 15 per cent.

We also recommend reviewing your cover annually with a LifeDirect adviser. We can help you stay on top of your premiums and re-assess your protection, to ensure you're only paying for what you need.

What if you move or travel overseas?

If you move overseas, keep in mind that policies usually only cover treatment in New Zealand (though some insurers do offer cover in both New Zealand and Australia).

You may choose to cancel your health cover if you emigrate permanently, but if there's a chance of returning, it may be worth keeping your insurance for two reasons:

  • You're likely to lose important benefits, as any conditions you may have developed since you took out cover will unlikely be covered by your next policy.
  • If a significant health issue emerges while overseas, you can return to New Zealand for treatment.

Lastly, if you're heading overseas for travel, most New Zealand health insurance policies include an 'overseas treatment' benefit. But that's not the same as having travel insurance. It means it may help you cover the cost of receiving a medical treatment overseas if that's not available here in New Zealand. For medical assistance during your trip, we recommend looking at travel insurance or international health insurance.

Like to talk?

At LifeDirect, we care about protecting your financial health. If you're looking for cover, our quote compare tool is a good place to start, but we're also real people and we're just a phone call away. Call us on 0800 800 400, start a Live Chat or fill in our contact form to get in touch with our team.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.

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