Business Personal Finance

Monday 14 October 2019

Your Questions: Is it worth taking out a cash plan before opting for health insurance?

 

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Charlie Weston

Charlie Weston

Q: I am considering taking out some level of health cover for myself and my partner but I have a limited budget. If I opt for a HSF Health Plan or a DeCare dental policy and later upgrade to full health insurance, will I receive any credit from the insurers in terms of reduced waiting periods?

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A: The answer here is no, according to Dermot Goode of TotalHealthCover.ie. While the plans mentioned offer excellent cover for out-patient or dental expenses, they are not health insurance plans and therefore you will not receive any credit from the health insurers for this type of membership, he added.

Also, remember that if you are over 34 when joining health insurance for the first time, higher premiums will apply on top of waiting periods. If your priority now is for good out-patient or dental cover, then HSF and DeCare have a range of excellent policies to suit your cover needs and budget, he says.

However, if you are looking for proper health insurance, you will need to consider the likes of Irish Life Health, Laya or Vhi for this, and expect to pay a higher premium for this type of cover as well, Mr Goode said.

Q: I am a farmer living in Sligo and my van insurance is up for renewal in a couple of weeks. I received my renewal notice, and I was surprised to see that my premium is up this year, from €570.94 in 2018 to €701.03. I can't understand why this is. Anyone else I know in a similar position and age says their premiums have reduced. I'm 33 and drive a 2013 Citroen Berlingo valued at €6,000. I have never made a claim and have a full no-claims bonus.

A: You need to stop and shop. Shopping around is always a good move, even if your premium has not gone up, says Shauna Fogarty, manager at InsureMyVan.ie.

The motor insurance industry varies significantly in the prices charged across the board, so you will never know if you are getting the best deal on the market until you check the prices offered by other insurers.

In your case this is particularly true, given that an analysis of van insurance premiums by InsureMyVan.ie has revealed that these recently have declined by 5pc to 20pc.

Several factors underpin this, one of which is that competition is heating up in the market, with more insurers vying for business, Mr Fogarty said.

We are also beginning to see the trickle-down effect of anti-fraud measures which insurers and even brokers have implemented over the last three years, Ms Fogarty added.

Taking the information you have provided and assuming there were no mid-term changes to last year's policy, insurance cover for you can be had for €364. That's less than your previous premium and far less than what you have been quoted for this year.

Ms Fogarty said there is a lesson in this for anyone renewing: Don't take the first price offered because usually you can do better.

Q: I am switching to a higher-paying job in late September but will have a couple of weeks off before I start. I would love to get away for a holiday, but am a little short of cash at the minute. What are my options? Should I put it on the credit card?

A: It is not recommended that you put the cost of the holiday on your credit card. This is because it will cost more in interest.

Also, because there's no set repayment schedule, it's too easy for us to slow the repayment or just pay the minimum and end up with quite a bit outstanding 12 months down the line, according to Kevin Johnson, CEO of CUDA (Credit Union Development Association).

A better option could be to take out a personal loan for this holiday, he suggests. Credit union members typically borrow €2,000 to €3,000 for a family holiday. They typically repay this borrowing over the following 12 months, with personal loans currently charging typical rates of about 9pc APR (annual percentage rate) compared with credit cards' charges in excess of 20pc APR, Mr Johnson adds. Aside from the rate being relatively low, another benefit is that people can repay this loan earlier if they so wish and they will not incur a penalty for doing so. So if you find yourself particularly flush in the coming months with your higher-paying job, you might find yourself being able to increase your repayments, and you could have that holiday loan paid off by the end of the year. That would be just in time to begin saving for the next one or even to consider taking a winter break.

If you are looking for proper health insurance you will need to consider the likes of Vhi, Laya and Irish Life Health and expect to pay more than for a cash plan.

It is not recommended that you put the cost of a holiday on your credit card, because it will cost you more in interest and it can take a long time to repay.

Irish Independent

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