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Apple watches, cinema tickets: Are health insurance perks worth it?
By John Collett
Health insurers are now offering a raft of sign-up incentives, as well as rewards for meeting fitness goals – such as Apple watches, airline points and discounted cinema tickets – making it harder for customers to discern if they’re receiving real value for money on their cover.
While the most popular sign-up incentives continue to be offerings such as no premiums for the first several weeks and cashbacks, rewards points can be redeemed for a wider range of things.
Compare Club’s Kate Browne says while health insurance perks are nice to have, they should not distract from the cost-to-benefit equation.
“The types of incentives are growing, but you could be paying for the incentives several times over if you don’t do your research”, says Kate Browne, the head of research at comparison site Compare Club. “While a lot of these extra benefits seem appealing, you do need to look at the cost-to-benefit equation.”
“While a 12-week premium holiday is an excellent way to save a decent amount off your healthcare bill for the year, some of the other perks may not be worth it if you are paying a higher premium.”
Many of the rewards are for fund members who join the health insurers’ health and fitness programs and who meet specific goals, though insurers are offering plenty of incentives to entice new customers to their hospital or extras cover.
AIA health members, for example, who sign up to AIA Vitality – a personalised wellbeing program – and achieve their weekly target each week for 24 months can earn enough points to redeem an Apple Watch and a host of other items, such as discounts on flights with Virgin Australia and cheap cinema tickets.
Qantas Insurance, which is underwritten by nib, offers a Qantas point for each dollar spent on the premium every month and offers 12,000 Qantas points a year to members who download the Qantas Wellbeing App and walk 10,000 steps each day. Sometimes, for limited periods, Qantas points are offered to new members.
Those who join Medibank and maintain a certain level of cover can earn rewards points and receive a certain number of weeks of cover for free, depending on the policy chosen.
Browne says while frequent flyer points can be very handy for those who are “super strategic” in accumulating them, particularly with paired credit card points, you still have to be careful not to pay too much for the insurance to start with.
She says the “sweet spot” for most people is when they switch to a lower premium, while taking advantage of offers such as the first 10 to 12 weeks with no premium. Even then, you need to be clear on what the policy covers.
“We see people come to us thinking they are covered for a knee replacement, which is one of the most expensive surgical procedures with long waiting times in the public system, who actually purchased cover for a ‘knee reconstruction’, which is an entirely different procedure,” Browne says.
She has also seen people drop to basic-level hospital cover to save money, or to avoid the Medicare Levy Surcharge or the Lifetime Health Cover loading, when a Bronze policy may only cost an extra $10 a month but provide significantly more cover.
To help consumers compare hospital cover, insurers must categorise their policies as Gold, Silver, Bronze or Basic. The tiers do not apply to extras cover.
Each tier specifies services and treatments that must be included. The higher the tier, the greater the number of categories covered.
However, the value of the tiering for consumers is limited because insurers are allowed to have “plus” policies where, for example, a policy meets the standard for Bronze, but the insurer adds an extra element of cover so that the policy is classified as “Bronze-plus”.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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