Why you need to review your health insurance before June 30
The cost of living in Australia is soaring, and if it seems like you just can't escape the extra hit to the hip pocket, you're not alone.
Prices are creeping up everywhere we turn, making the end of financial year a great time to review your household bills to see if you can save some of that hard-earned money and start the second half of the year on the right foot.
But where do you even begin? Let's kick things off with private health insurance.
What's private health insurance got to do with the EOFY?
We know, you're probably wondering "what's private health insurance got to do with the EOFY?" For many it can confusing but what you might not realise is that June is one of the busiest times of the year for private health insurers. This month, many Australians are prompted to sign up for or review their policies.
One of the reasons for this includes higher income earners looking to avoid paying extra tax via the Medicare Levy Surcharge (MLS) in the new financial year. That's generally those of us with a taxable income above $90,000 for singles or above $180,000 for families.
So, if you fall into that category, you may be able to find appropriate private hospital cover for a similar price to the additional tax required to pay via the MLS.
Have a good think about the difference in cost between the additional tax and taking out an appropriate level of hospital cover.
Another reason June is a busy time for private health insurance is those younger Aussies looking to take out cover before they turn 31 to avoid paying higher premiums later in life due to Lifetime Health Cover (LHC) loading.
Unlike the MLS, LHC loading is not a tax. It's actually a government penalty for people who do not continue to hold eligible hospital cover by July following their 31st birthday.
So, if you're a higher income earner or about to turn 31, the EOFY is a particularly good time to think about whether you should take out an appropriate level of private hospital cover.
What else should I check?
If you have private health insurance, something else you could consider this EOFY is whether or not your premium increased on April 1.
If it did, don't simply accept that higher premium. Consider shopping around to see if you could find a better deal.
If your premium rate rise was deferred until later in the year, don't sit back and wait before you look for a better deal. You could already be paying more than you need for private health insurance.
Should I stop there?
The EOFY is a good time to review all of your finances and look for ways to save money in the year ahead.
Too often people end up paying what we call the lazy tax, meaning they're forking out more than they need to for things like private health insurance or electricity, because they haven't reviewed their policy or plan in years and may no longer be getting a good deal.
Don't just set and forget. Start the new financial year off the right foot and review all of your household bills and expenses, especially during a time when many Australian households are under increased financial pressure they haven't experienced in years.
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