Why It Pays to Review Your Health Insurance Plan Annually
Published October 13, 2025
For most Australians, health insurance is the bedrock of their financial and personal health, largely due to how it insulates you from unforeseen medical expenses and provides you with the reassurance you’ll always be cared for. But concurrently, too many individuals view their health insurance as a set-and-forget acquisition. They might miss out on improved coverage or reduced premium savings. That’s the reason why examining your health insurance plan annually is an intelligent move to maximize your returns.
Why is reviewing your health insurance important?
Life is full of significant changes from marriage to having a family, aging or changing career and your healthcare needs will evolve along with these milestones. A policy that was sufficient a year ago may no longer be able to provide you with a sufficient amount of cover, or it may have inclusions that you no longer need to utilize. If you do not review your plan from time to time, it will probably lead to excess spending or gaps in your coverage.
Aside from your individual situation, the health insurance environment continues to evolve. Insurers rewrite the price of their premiums annually, they tinker with their benefits and they occasionally launch new plans to remain competitive. If you do not keep tabs on these changes, you might end up paying more than you have to.
Top 3 reasons to examine your health insurance plan annually
1. Changing Life Stages
Your insurance needs will change as you go through various life stages:
- Having a family: Obstetric and pregnancy services come with a 12-month waiting period, so if you have children in the pipeline then it’s absolutely essential to upgrade your plan beforehand.
- Having children: Families will require plans with high extras cover for orthodontics, dental, and optical, which are usually claimed by children.
- Empty nesting: Once your kids are no longer dependents, you can modify your policy to eliminate any benefits that are not necessary and expensive such as pregnancy cover.
- Retirement: The elderly can gain from policies that offer cover against health issues related to aging, such as cataract operations or hip replacements.
Bottom line? Revising and updating your policy ensures that it will always mirror your current life stage and prevent you from shelling out unnecessary expenses for services you no longer require.
2. Rising Cost of Living
With rising cost of living and inflation, the fact is that looking for methods to cut unnecessary spending is necessary. Too many Australians pay more than necessary for their health insurance by retaining their policies with unused benefits. If, for instance, you no longer use services such as orthodontics or acupuncture, changing to a better health insurance plan may save you hundreds of dollars annually.
3. Tax and Other Financial Incentives
Health cover isn’t all about hospital cover it can also affect your taxes. For the more affluent, private hospital cover can see you exempt from paying taxes, to the tune of 1% to 1.5% of your taxable income. Singles with incomes above $101,000 and couples/families over $202,000 for the 2025-26 financial year stand to benefit significantly from this exemption.
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