Health insurance plays a crucial role in protecting both your finances and your wellbeing. It gives you peace of mind knowing that unexpected medical costs won’t derail your life. Yet many people take a “set and forget” approach with their policies, leaving them stuck with cover that no longer suits their needs or costs more than it should. An annual review can ensure your plan keeps up with your changing lifestyle and helps you get better value for money.
Why an annual review matters
Life doesn’t stand still, and neither should your health insurance. Major milestones—such as getting married, starting a family, children leaving home, or entering retirement—can dramatically shift your healthcare requirements. A plan that once offered the right mix of benefits may now include extras you no longer need, or worse, may not cover essential services for your current stage of life.
On top of that, insurers adjust their premiums and benefits regularly. Without checking your plan, you risk paying higher costs for cover that may not even be the best option available.
Three key reasons to review your policy
1. Life changes quickly
Each stage of life brings unique health priorities. Couples planning a family need pregnancy and maternity cover well in advance. Parents often find themselves using extras such as orthodontics or optical for their children. Empty nesters may want to drop services they no longer use, while retirees may seek cover for age-related procedures like cataract surgery or joint replacements. Adjusting your plan ensures it stays relevant while cutting out unnecessary costs.
2. Rising expenses
With the cost of living climbing, reviewing your insurance can help identify ways to trim unnecessary spending. Many people continue paying for services they never use—like acupuncture or high-level extras—without realising a simpler policy could save them hundreds of dollars each year. Switching to a plan that better reflects your actual usage is one of the easiest ways to reduce expenses.
3. Financial benefits and tax incentives
Health insurance is also tied to financial incentives. For higher earners, having hospital cover can exempt you from the Medicare Levy Surcharge, which ranges from 1% to 1.5% of taxable income. Annual reviews also help you stay on top of rules like the Lifetime Health Cover loading, which adds 2% to your premium for every year you delay taking out hospital cover after age 31. Regularly checking your policy helps you manage both your healthcare and your finances effectively.
How to approach your annual review
Step 1: Assess your current plan
Look at both your hospital and extras cover. Ask yourself which benefits you actually use, which you rarely claim, and whether your annual limits make sense for your needs. This will give you a clear picture of whether your money is being well spent.
Step 2: Compare alternatives
Australia’s health insurance market is competitive, and new options regularly appear. Take time to compare policies across different providers, paying attention to cover levels, waiting periods, extras, and overall costs. Sometimes even a small adjustment can make a significant difference to both your coverage and your budget.
When to consider switching providers
If another insurer offers a better price, higher benefit limits, or promotions such as waived waiting periods, it may be worth changing. Thanks to portability rules, you won’t need to re-serve waiting periods for equivalent benefits when switching, making the process less daunting.
The benefits of reviewing yearly
By checking your plan at least once every 12 months, you can:
- Ensure your policy matches your current health needs.
- Remove unnecessary extras to lower your premiums.
- Maximise government rebates and avoid extra tax costs.
- Stay ahead of premium increases and policy updates.
Final thoughts
Health insurance is too important to leave unchecked. An annual review ensures your plan evolves with you, keeps unnecessary costs at bay, and provides the right level of protection when you need it most. A small investment of time each year can translate into long-term peace of mind and financial security.
