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Health Insurance

What is a health insurance excess?

When setting up a health insurance policy, you'll have the option of how much excess you'd like. Your excess amount is the part of your claim that you agree to pay.

How does an excess work?

If your excess was $250 and the hospital bill was $5,000, you'd pay an excess of $250 and your insurance company is required to pay $4,750. Most insurers will offer a range of options when it comes to how much excess you pay. This bids the question, should you go high or low with your excess?

The beauty of an excess is that it reduces your health insurance premium, so the larger the excess you choose, the lower the cost of your premiums. This is great, but the flipside is that, the higher the excess, the more you need to pay more if you make a claim.

How to choose your excess

When you do an insurance quote on LifeDirect, we usually suggest two things when choosing an excess. The first is to pick a figure you're comfortable with – make sure you would be able to come up with this sum if you needed to claim.

Secondly, it's always safe to start with the lower option. The reason is because it's always easy to increase your excess in the future. To increase your excess, it just requires notifying the insurer basically, while lowering your excess usually involves completing a new application and an assessment by the insurer. So it's usually best to start lower, and review down the track.

If you're not sure about how much insurance cover you need, or would like to see how much you'd have to pay for health insurance, simply start a quote online and compare insurance from NZ's top insurers. Otherwise feel free to give us a bell on 0800 800 400 for a chat.

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