Why couples' health insurance policies are a waste of money


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If you're in the market for health insurance, you might think that getting a couples policy is both more convenient and cheaper than taking out two separate policies. But while it might be more convenient, you'd be wrong about it being cheaper.

Unlike other products, such as travel insurance, that incentivise two people to have one policy, health funds bank on couples streamlining simply for the sake of ease.

A recent survey from Finder found that about 3.5 million Aussies have a couples policy. The problem is that when you take into consideration age, gender and lifestyle, couples generally have different individual health needs, which means that someone is getting a bum deal.

couples health insurance joint health insurance

Let's have a look at a hypothetical husband and wife.


Age: 33

Hospital wants: Enough cover to avoid lifetime health cover (LHC) loading and the Medicare levy surcharge (MLS).

Extras wants: Has a bad back, so would like the occasional remedial massage. Is longsighted but doesn't get new glasses every year. Hasn't been to the dentist in a while but might if covered.

Verdict: If all he's after for hospital is enough cover to avoid the LHC and MLS, then he'll only need a basic policy at the very least, if not a bronze tier hospital policy as a "nice to have". In the end, he goes for a basic policy for $70 a month.

As far as extras go, you can find a bottom-shelf policy for about $12 a month, though most of these only cover routine dental and a bit of physio. As for optical, he might be better off taking out a lower tier of extras cover and self-insuring for optical.


Age: 32

Hospital wants: Enough cover to avoid the LHC loading and the MLS. Also thinking about having kids in the near(ish) future and wants cover for pregnancy services such as a private room.

Extras wants: Is shortsighted and likes to change her look every year or so. Also wants to get biannual dental check-ups. Wouldn't turn her nose up at a massage either.

Verdict: While she may only want basic cover to avoid the LHC loading and MLS, since she also wants cover for pregnancy, she is going to need either a gold tier or a silver plus hospital policy that covers pregnancy services. Let's say she finds a policy that covers pregnancy for $160 a month. But don't forget extras. There is the routine dental to consider, plus physio. Add cover for optical as well. A mid-level extras policy comes in at $30 a month.

How did they end up?

Well, he would walk away with a hypothetical monthly health insurance bill of $82, whereas she is looking at $190.

Imagine if they'd bundled their cover. In most cases, you'd end up defaulting to the person with the higher level of cover or risk leaving someone underinsured.

Instead of paying a combined $272 a month for two separate policies, they'd end up paying $380.

That's an extra $1296 a year just for the "privilege" of having couples' health insurance. Why would you do it?

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May 9, 2019 1.16pm

When I had my children (30 years ago), I was told by my fund we'd need a family policy to cover any extra needs the baby might have in hospital right from birth. Ie an individual policy covering only me would not cut it. I don't know whether that was true; not wanting to take the risk, we changed to the family cover. Even that long ago the waiting time for pregnancy cover was more than 9 months.

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