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Eight health insurance pitfalls to avoid

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Rises in the cost of health insurance have hit consumers hard

Rises in the cost of health insurance have hit consumers hard

Rises in the cost of health insurance have hit consumers hard

There is now real competition in the private health insurance market with four insurers fighting for market share - Vhi Healthcare, Laya Healthcare, Aviva Health and GloHealth.

The downside of this competition can be summed up in one word - complexity! With over 300 products and benefits changing almost monthly, it's not surprising that consumers fall into the many pitfalls associated with health insurance and miss out on valuable savings.

Here are eight of the most common mistakes that consumers make with health insurance - which you would do well to avoid.

One: Putting all your dependents on the same plan. Everyone has different cover requirements so insure all dependents only up to the level of cover they need - you can have everyone on the one policy but all on different plans.

Two: Cancelling your health insurance on the basis that public treatment is free - it's not! Unless you have a medical card, you will be charged up to €750 per year in a public hospital, and this applies to children as well.

Three: Not reading the small print on your renewal documentation. Don't just look at the price. Check if the insurer is reducing or eliminating certain benefits. You may need to change to retain benefits that are important to you. Failure to check your cover at renewal could leave you facing hefty shortfalls should a claim arise.

Four: Staying with the same insurer for the wrong reasons - many consumers think they can't switch due to pre-existing medical conditions. Not true. All insurers must give you full credit for time served with your previous insurer.

Five: Misunderstanding private hospital excesses (the first part of a claim you must pay for yourself in a private hospital). Many consumers are afraid to take an excess as they believe they apply for each night in hospital. On most plans, the excess applies per admission (on the total bill) and only in private hospitals. Taking a plan with an excess is a great way to reduce your costs.

Six: Thinking you can't access an insurer's corporate plans. Think again. You can buy any plan on the market regardless of what it's called or who it's designed for. Don't make the mistake of assuming you have the best deal just because you're on a corporate plan however. Plans change each year so find out what the latest best deal is and make sure you're not over-paying for your cover.

Seven: Not reviewing your cover each year. Think of health insurance just like car insurance. Shop around at each renewal date; check for special offers; and if you find a good deal, ask the right questions and change or switch. While reviewing cover can be tortuous, the savings in some cases can be significant. The Health Insurance Authority (HIA) website has full details of all plans on the market. In many cases, a little bit of research will secure you a better overall deal with your current provider - so may not need to switch insurer.

Eight: Not asking the right questions when you phone your insurer prior to renewal. Never ask "What can you offer me?" Always ask for the nearest equivalent plan across all the insurer's plans. When your insurer offers you a lower cost plan, get it to explain exactly what you're losing and what its upgrade rules are.

  • Dermot Goode is a health insurance expert with www.totalhealthcover.ie

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