Health insurance comes in many forms at many prices, and it can be hard to know where to start looking. This article works through the important factors one by one, so you can choose a plan that fits your life and your budget.

Start by surveying the benefits you already have

Before buying more, check what cover you already hold — social security, company benefits, or universal coverage — and look for what is still missing: a room rate that may not be enough for the hospital you intend to use, or a limited surgical benefit. Buying to fill a gap is usually better value than buying something you already have.

The treatment limit: lump sum vs itemised

A lump-sum plan gives a combined limit per year or per event and can be used more flexibly. An itemised plan sets a ceiling for each item — room, surgery, medication — which usually costs less in premium but requires reading the conditions more carefully. Both have their merits, depending on what you need and what you can afford.

The room rate is where realism matters

Look at the room rates of the hospital you use often or that is near home, and choose a plan covering that level. Choose a room rate below reality and you pay the difference yourself every time you are admitted; choose one too high and the premium is expensive unnecessarily.

Read the important conditions before deciding

  • Waiting periods — these differ between ordinary conditions and specified ones.
  • Pre-existing conditions — generally outside the cover; declare your health truthfully.
  • Renewal conditions and how the premium is likely to rise with age.

Cover and exclusions follow what is stated in each policy, so read the summary of conditions in full before signing.

Set a premium budget you can sustain

Health insurance is a contract renewed each year, and the premium rises with age. One approach is to set a total premium budget that does not affect other essential expenses, and allow for higher premiums in future. Choosing a plan you can keep paying matters more than one with high cover that has to be cancelled halfway.

In short

There is no single plan that suits everyone — only the plan that suits your situation at each stage of life. If you are unsure, talk to someone who explains the conditions straightforwardly, and compare more than one option before deciding.