📉 The Negative Return
You pay $1,200 a year for "Extras" cover (Dental, Optical, Physio). You visit the dentist twice a year for check-ups, which would cost $400 without insurance. The insurer pays the $400. You feel relieved because "it was covered." Stop and do the math. You paid $1,200 to receive $400 worth of service. You effectively donated $800 to the insurance company.
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| Paying for 'Extras' Cover? Stop! |
Unlike "Hospital Cover" (which protects you from catastrophic $100,000 surgery bills), "Extras Cover" is designed for predictable, manageable expenses.
For many young and healthy Australians, holding Extras cover is mathematically a poor investment. It functions as a pre-payment plan with a terrible exchange rate.
The "Annual Limit" Ceiling
Insurers are astute. They implement strict caps on your payouts to ensure the house always wins.
🦷 The Major Dental Trap:
You need a Root Canal ($2,000). You think, "Thank god I have insurance." You check your PDS (Product Disclosure Statement).
• Annual Limit: $600 for Major Dental.
• The Gap: You pay $1,400 out of pocket.
Even with insurance, you cover the majority of the bill. And remember, you have also paid your monthly premiums all year.
The "Self-Insurance" Strategy
Unless you wear glasses, require regular physio, AND have dental issues simultaneously, you are likely better off Self-Insuring.
If you divert that premium into a dedicated high-interest savings account, after 5 years you will have over $6,000. That provides ample coverage for almost any dental emergency in full, with zero waiting periods and no sub-limits.
Chief Editor’s Verdict
Extras cover is beneficial for families with children needing orthodontics or glasses. For single, healthy adults? It is often a waste of capital.
Log in to your insurer's portal. Audit your "Claims History" for the last 12 months. If you claimed less than you paid in premiums, consider cancelling your Extras. Note: Cancelling Extras does NOT affect your Medicare Levy Surcharge status (only Hospital cover does).
🇦🇺 Essential Insurance Guides for Australians
Don't get caught without cover. Read these must-know guides:
👉 P-Plater Insurance Costing $3,000? 5 Ways to Slash Premiums 👉 Planning a Baby? Beware the '12-Month Waiting Period' Trap 👉 Visa Refused? The Strict 'OVHC' Rules for 485 & 482 Visas 👉 Stolen Tools? Why Your Ute Insurance Might Pay $0 👉 Funeral Insurance vs. Pre-Paid: Don't Bankrupt Your FamilyThe information provided in this article is general in nature and does not constitute financial advice. Health insurance needs vary by individual. Cancelling "Extras" cover may result in serving new waiting periods (typically 2 to 12 months) if you decide to rejoin later. Please note that only "Hospital Cover" exempts you from the Medicare Levy Surcharge (MLS) and Lifetime Health Cover (LHC) loading. Always read the Product Disclosure Statement (PDS) and consult with a professional before making changes to your policy.
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