One in three ignorant on private health insurance
One in three Australians is ignorant about the use of private health insurance, with a quarter unaware that a government rebate exists, new research has found.
The Australian survey of 622 respondents who have private health insurance found 26 per cent did not know about the Australian government rebate while 45 per cent did not understand how the rebate works, and 37 per cent did not know the rebate figure last financial year.
Sixteen per cent said they did not know about the Medicare levy surcharge.
Comparison organisation comparethemarket.com.au, which commissioned the survey, is calling for more Australians to get more educated about private health insurance.
“A lack of knowledge suggests a good proportion of Australians do not know how to maximise value from their insurance nor minimise costs,” comparethemarket.com.au spokesperson Grant Waldeck said.
“This is a concern with the 6.2 per cent average increase in health insurance premiums to take effect from 1 April. In particular the findings challenge the general perception that private health insurance is largely used to reduce the Medicare levy surcharge.”
The survey also showed 60 per cent of respondents have never switched health insurers. Only 20 per cent understand the claiming process “very well”.
Money Management’s sister publication Super Review conducted its own survey last year, which found fund executives and trustees thought less than 30 per cent of their fund members actually understand the life insurance they receive through their superannuation fund.
Conducted at the Association of Superannuation Funds of Australia (ASFA) national conference in Perth last year, the survey found 27.5 per cent of respondents believe that only around 10 per cent of fund members understood life insurance offerings with their fund, while 16.3 per cent believed 20 per cent of members might have an understanding.
The findings came at a crucial time as the Government is being lobbied around adviser remuneration for life/risk sold inside super.
“The reality is that health insurance is only at the forefront of a consumer’s mind when it’s time to claim. At this point it’s either too late, as the policy doesn’t match the claim, or the consumer realises that they’re not receiving the best value,” Waldeck said.
Recommended for you
Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
The firm has announced it will no longer be writing new life insurance policies in the retail advised and corporate group insurance channels, citing a declining market and risk adviser numbers.
