Details on how to secure your health insurance premium. Despite the fact that a significant number of people in Australia are struggling to pay their monthly insurance premiums, there is a way to avoid a price increase in a single easy action.
Customers of private health insurance can take advantage of a clever little technique that allows them to postpone any proposed increase in premiums until as late as April 2024.
There will be thousands of people in Australia who are experiencing financial strain as a result of the announcement made by the government that the average increase in health insurance premiums for 2022 will be 2.70 percent.
You may be able to save money by employing a strategy known as “locking in your premium.” This is how it works.
The best way to save money and freeze your health insurance prices
By making a full payment of twelve to eighteen months’ worth of premiums at the rate that was in effect the previous year, you can essentially freeze your health insurance costs. This can be done before the deadline for your insurer to raise premiums, which may be April 1 or perhaps later if there is a deferral in place.
In order to ensure that your premium remains at the current rate, it is necessary for your policy to begin and for your bank to complete your annual payment prior to the day that your insurer will increase your premium.
It is important to keep in mind that the processing time for your payment at the bank might take up to six days, so make sure you do not come too late.
What to consider before locking in your premium
According to Sophie Ryan, a spokesman for iSelect, “freezing” your premium might assist lessen the financial stress that comes with the annual price increase.
“Prepaying your annual premium in advance for the entire year before your increase goes into effect will allow you to lock in your current rate and help you avoid the 2022 premium increase for another year,” she wrote. “If you are in a position to do so, you should consider doing so.”
By making payments in advance, prior to a premium increase, you have the potential to save money. This is because you will effectively delay having to pay the increased premiums for a period of up to one year, in the event that your insurance premium increases in 2022.
Ms. Ryan recommended that customers examine their financial situation to determine whether or not they are able to pay for an entire year’s worth of insurance premiums in advance.
“Before you decide to lock in your premiums for a year, the first thing you should do is consider whether or not you have the financial means to do so,” she advised.
You might also browse around to see what costs other insurers are charging in order to determine whether or not you could find a better offer elsewhere you could purchase insurance from.
Two years of premium savings up for grabs
By delaying the increase in premiums for as long as two years, Australians have the opportunity to save even more time and money.
In response to the pandemic, a number of health insurance companies have implemented premium deferrals, which enable clients to postpone paying the costs that will be in effect in 2021 for an additional 18 months to two years.
The investment firm HCF, which is the third largest fund in Australia, has postponed price increases until November 1st, making it the longest deferral.
You will be able to lock in premium prices for 2021 until as late as April 2024 as a result of the action made by the non-profit organisation.
Sheena Jack, the CEO of the HCF, stated that the organization’s primary focus has always been on its members and on maximising affordability.
What we can do is keep those rates as low as possible, and this year’s increase will be the lowest in twenty years, she added. “While we would love to have no premium increase at all, what we can do is keep those premiums as low as possible.”
Additionally, we have promised to postponing the increase in our premiums for a period of seven months, which will bring it to November.
According to Ms. Jack, they want their members to have options that are tailored to their specific requirements and conditions.
“One of those options is to make a payment up to 18 months in advance from the date of payment, effectively locking in their current rate for that period of time,” she encouraged. “This is one of the options that is available to you.”
By making an advance payment at any time prior to November 1, 2022, members have the opportunity to take advantage of the recently implemented rate freeze.
It is one way that we can stand up for our members and provide support by meeting their requirements and budgets in a more effective manner than anyone else.
When should I lock in my premium?
If your premiums are scheduled to increase on April 1, the optimum time to lock in your price is before the middle of March. This is because certain banks may take up to six days to complete your payment, and other insurers have a cut-off date that is prior to April 1.
Remember that you can lock them in at any time before April, but before you do so, check with your insurer to find out when the cut-off date is. This will ensure that you do not lose out on the opportunity to save some money.
It’s possible that your insurance provider won’t raise your prices for another half a year, which will give you more time to think about the various choices available to you.
When I lock in my premium, what are the benefits that I receive?
When Australians who have health insurance lock in their premiums, they are able to automatically receive a discount on their year payments. This is a simple solution to avoid higher charges on an annual basis.
The fact that you are paying for the following twelve months in advance means that you will have one fewer monthly bill to worry about, which might save you both time and stress.
In spite of this, it is essential to keep in mind whether or not you are in a position to pay for the entire year in advance.
