Health Insurance

Private Medical Health Insurance

One of the perks of having private health insurance is being treated as a private patient in any hospital. This usually means having your choice of doctor, hospital and treatment time.

And even better, you are likely to find that, when it comes to elective surgery (surgery for a non-life-threatening condition, like a knee reconstruction), you will have a shorter waiting period, as people with private medical insurance are given priority.

Basic Benefits

As a privately insured patient, there are attractive policy benefits (aka extras) to choose from. These can help reduce your day-to-day expenses for many common items like glasses, massage, dentistry and chiropractic treatments. Some providers also offer cover for natural therapies, although YMMV, so check your policy before assuming natural therapies are covered.

How to save money on your private healthcare?

With health insurance costs to rise an average 6% this year, families may struggle to find the extra $200 required for private health cover.

What options are there for people who want to save money in light of rising costs? Well there are a few:

  • Pay upfront – Avoid the April price increases and lock in the 2009 prices by paying your annual health insurance premium upfront. If you pay your entire 12 months upfront you lock in the prices that period, putting off the affects of an increase until next year (at which point you could lock in another 12 months) Based on the average price rise across funds / products, this could equate to a saving of 5.78% over the year (a saving of around $170 for family cover)
  • Pay by Direct Debit Many Companies offer a discount for paying premiums by Direct Debit. Nib give a 4% discount for direct debits paid from a cheque or savings account, ensuring that those who are not in the position to pay upfront can still take advantage of discounts and savings.
  • Shop Around The average price increase is 5.78%, but some of the larger organizations have only increased their prices by 5.74%, whereas some smaller Companies have increased their premiums by a whopping 7%. Always check the level of cover you are receiving and shop around for an even better deal. By combining this with the other tips above, you could be saving big time!

Private healthcare in America

In his weekly address, President Obama has urged Congress to revolve legislative issues that are delaying the health reform being signed into law in the coming weeks.

With average health insurance premiums increasing by 100% since 2000, it is no wonder many families in America are struggling to find an affordable health insurance premium under the current health system.

Obama’s Health Insurance Reform aims to improve the health system by providing more security and stability to those who have coverage, provide coverage to those without and reduce the cost of health care for families, businesses and government.

If all goes well, there will be immediate benefits soon after enactment of the bill.

These include:

  • Citizens with pre-existing illness would be able to buy affordable insurance
  • Children with pre-existing conditions would no longer be denied coverage
  • Small business owners who could not afford to cover employees would receive tax credits to buy insurance.

These benefits are due to take effect within the first year of reform. With many changes to come, President Obama aims to reach long term goals of improving America’s health system.

Health Reform Progress

Children’s Health Insurance Reauthorization Act ensures quality health care to 11 million children

American Recovery and Reinvestment Act protects health coverage affordable for Americans who lose their jobs

Recovery Act invests over $22 billion into the areas of:

  • Reducing medical costs
  • Improve quality of health services
  • Ensure Patient Privacy by computerising medical records
  • Research into best treatment decisions
  • Training next generation of doctors
  • Promoting prevention and wellness to improve America’s health
Health Insurance

What are basics of Health Insurance? Let’s find out

It is important to save money on Employee Health Insurance. It’s not easy to figure out how to save money. There are different strategies to follow. Let’s take a look on the ways to control the cost of the Insurance.

  • Make sure you are familiar with all of the rules of your employee health insurance plan, and that you follow them. Each plan will have rules of regulations of pre-authorization and providers networks. If you don’t stick to the rules you may find that you don’t have coverage for your treatment. Do not make assumptions about the plan. You must read your policy terms and feel free to ask questions from policy provider representative. Remember that a lack of information can cost you money.
  • You may be able to opt out of certain coverage features that you do not need. There are certain services like Mental health services, chiropractic services, and maternity stays, are not required for many people. In some states, employee health insurance companies are allowed to offer insurance policies that include only mandated items of coverage. You can save money from these policies.
  • Be prepared for emergencies by becoming familiar with the full aspects of your health insurance coverage. If when an accident occurs you are familiar with which hospitals and physicians are included in your network, you will be in a better position to make confident decisions in an emergency. This information should be kept handy in case you need it quickly.
  • Saving money on prescription costs will help your overall health insurance strategy. There are typically eligibility requirements for programs such as these as they are primarily designed for those with low income or no insurance coverage.
  • Do you have any bad habits? If you quit smoking you will become a more desirable candidate for insurance coverage. Smokers automatically pay higher premiums. You want to see immediate results, as it may take about 3 years to qualify for better rates enjoyed by non smokers.
  • Exercise, and get fit. The obese will pay more premium than smokers, the aged, or alcoholics. Getting fit will surely benefit you and let your life span more healthy. Healthy people experience less stress also.


Different kinds of medical health cover are appropriate at different times of life. From 30 years of age, preventative activities take on more importance such as gym memberships, massage, acupuncture and other extras. Whilst these may not be important in your 20s, including them in your employee health insurance premiums after 30 becomes important.

If you have not “settled down” in your twenties, the thirties is a decade when most people are likely to start thinking about a family. It is also an age at which you are better able to afford more comprehensive health cover. The insurers are keen to get the mid-20s to 30-somethings on board as; generally speaking, they are still fairly fit and healthy.


As well as the extras and family considerations from age 30 there is another important aspect of health cover to be aware of. Over the age of 30, the Government charges a penalty, if you do not have private health insurance. Each year a person is over 30 and without private health insurance, a two percent loading is added to the eventual cost of their premium capped at a maximum of 70 percent.

Those who have purchased private health insurance before their 31st birthday, and maintain their cover, may be offered loyalty bonuses by their insurer for being a long-term customer. As well, the Australian Government rewards those who have had 10 year’s continuous private health insurance membership with the removal of the loading.


An average private health insurance policy, providing basic hospital cover and mid-range extras, can cost between $60 and $100 a month. Basic hospital cover often takes care of things like transportation in an ambulance, pregnancy and birth-related needs, major eye surgery and hip and knee joint replacements.

The top of the line benefit cover may include full cover for hospital accommodation, no excess on day surgery and night stays in hospital, and extras cover for optical, dental, orthodontic and chiropractic needs.


For those wanting to start a family, there is only one piece of advice to remember: get in early (pun fully intended).

Take out your cover well in advance of falling pregnant, as there are often penalties and fees early in your coverage. Most funds have a waiting period of at least two months before any cover actually begins and for pregnancy this waiting period is typically 12 months.

If you’re going to play it by the numbers, and you like a little risk, this means it would be wise to wait at least four months after buying your insurance before falling pregnant, so that your baby will arrive after the waiting period has concluded. Obviously, the less of a gambler you are, the longer you want to wait, as many babies are born premature.

Health Insurance

A Term Life Insurance Policy That Pays Back, Sometimes

This Christian Science Monitor column introduces a new breed of life insurance: term life insurance policy with Return of Premium (ROP) features. Unlike regular term life insurance, in which you lose all the premium if you outlive the term of the policy, in ROP policies you will get all your premium back if you survive the policy term.

As you can expect, ROP policies will be more expensive than regular term policies. In the quoted example, “[f]or a basic $500,000, 30-year term life policy a healthy 40-year-old man might pay $895 annually vs. $1,232 for one with an ROP feature.”

Is this a good deal? If you just buy the regular term life insurance for $895, and save and invest the balance of $337 ($1,232 – $895) in the stock market, you will be able to get all the premium balance of $36,960 ($1,232 * 30) after 30 years if your investment turns in 7.82% annual after-tax return. It is actually a good guaranteed return for ROP policy holders.

However, the downside is for early withdrawal, your return on premium will be significantly less(the article quoted you will get 50% premium back if you withdraw after 15 years in a 20-year policy). In addition, if you die within the term, the payout is no different from the regular term life insurance.

The article correctly concludes that “you come out ahead with ROP insurance only if you hold the policy until it expires.”

In terms of life insurance, I will only consider regular term policies. Insurance and investment are two very different activities and it does not make sense to me to get an ROP or universal life policy and have my choices limited.

Life Insurance For Your Kids: Creepy, But…

Should you purchase life insurance for your kids? There are already many personal finance articles telling you no, but Jeff Opdyke put the reasoning in the neatest way by sharing his struggle in his WSJ column.

Let me summarise some rational and/or emotional reasons below:

  1. Do you want to benefit from the death of your kid?
  2. Kids don’t produce income, so the only tangible loss is burial cost. Do you really need an insurance to cover the small cost of burial?
  3. Think insurance as a saving tool at the minimal? Life insurance for kids can hardly be an efficient saving vehicle. Try tax-advantaged 529 plans or Coverdell Education Saving Accounts for your kids’ college expenses.

To put it into perspective, Insure a company offers to provide $10,000 coverage to my 2-year old at $7.28/month (WA Grow-Up Plan). The rate is guaranteed until my kid turns to 21, and the cash value is equal or higher than the total premium paid after 20 years. Coverage can be as high as $20,000. (Yes, it is Gerber the baby face — do you know Gerber is also in the business of insurance writing?)

By simple math, I need to pay $87.36 a year for $10,000 benefit. I don’t think I will be in short of $10,000 for the rest of my life, so the insurance coverage really does not mean anything to me. Think this as saving? Is less than $100 a year enough to cover the college books, not to mention tuition?