• Brad Pears

Extras Cover is it Worth it?

Private health insurance members with extras cover should be doing a simple maths equation to work out if having it is worth the cost.

About half the population has private health hospital cover, which for many has enticing tax benefits, but finance experts say it remains questionable whether extras cover makes sense.

The problem with extras cover is that there is usually some sort of gap to pay if it’s any sort of major treatment whether it be physio, dental or optical cover.  The gap will increase the bigger the bill.  The reason for this is the most people need to have one or more of these services regularly.  Insurance is not design for regular claims.  Insurance is for the events which occur infrequently and the insurance for everything no matter the cost. 

Further to that problem is that people pay a certain amount every year for extras cover and if you do not make a claim that money does not carry over to the next year and is lost if not used.  If that money was in your own account not only would you keep money it would gain interest in your own bank, so that when a big bill comes along you can cover it. 

If you haven’t done maths yet – call your health insurance provider ask them how much you have paid in extras cover and how much money you have received back from the in claims.  In most cases you will find the money paid out far exceeds the money paid back.  Another factor to remember is that a lot of policies have a limit as to what you can claim in a given year.  So imagine you have been paying your extras cover for the last 5 years with minimal claims.  All of a sudden you are in need of a major dental procedure or you break your glasses and need a new pair and you find from your health insurance provider that you have gone over your limit or are not even covered for that service at all.  A lot of people do not even realise that extras or ancillary cover is an optional extra and think it just comes with the health insurance.

Our advice is to do you maths and do some research see what the benefits really are.