How much is enough insurance?

On Sunday night I was admitted to Emergency with what felt like a gremlin living in my bones and muscles. I couldn’t sit, eat or touch my tummy without wincing in pain. Turns out I had influenza. The real kind.


Not to worry, I have private health cover. Right? NOT! After paying a $300 admission fee to our local private emergency department (and the closest one to home), the admissions nurse pulled Ben aside to say, “I’m not sure what she’s being admitted for, but she’s on one of the worst covers”.




Here I was thinking that “Accident and Emergency” meant emergency admissions in a private hospital. But it meant sweet FA. After being poked and prodded and eventually sent home, I sat in bed all day and also did sweet FA, except one thing. I changed my health cover.


Whilst feeding me pales of fluids, Panadol and accepting my disgusting flu state in all its glory, my husband also went through his insurance policies, not just health, but across the board. This was probably more shocking. At the ripe old age of 21, he met with a financial planner (and one currently under the microscope *wink, wink*) to make sure he was doing all the right things with his money and protecting himself if something ever went wrong with his job. Organised, right?


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He was advised or should I say railroaded, into believing he needed Trauma Insurance totaling over $90/month, even though he was paying a premium for similar cover through his job. We realized that he was paying for his Total and Permanent Disability Cover twice (through his job AND his Superannuation – dummies). Next on the list was his private Healthcare, and even though he requires top cover under his work contract, he was paying for bloody geriatric care! He made a saving of $132/month in the space of an hour. What a legend [shhh, we don’t talk about the 9 years of overpaid insurance].


As always, these bumps get me thinking (usually at 1am when I’m trying to sleep)…how much insurance is enough insurance?


And after some research, chats and WTF-moments I have collated all the bits I think you need to consider when making your Health and Life Insurance decisions.


Big Lesson? Insurance is a complex beast and one I’m still figuring out.


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Health Insurance

Generally speaking, there are three types of Health Insurance, 1. Ambulance, 2. Hospital, and 3. General Health (called ‘extras’). Figure out exactly what you want and don’t want cover for. I want Ambulance, Hospital (incl. basic surgeries), and major dental because I already have a nice house deposit sitting between my gums – I blame my Irish heritage on my terrible teeth!


Choosing the best Health Insurance is tough. If you want to embrace the savvy within you, there are compare sites which can be incredibly helpful but don’t tend to include the whole market of options. My advice: Don’t pick a company, pick the best cover for you and your needs.


Always read the product disclosure statement for your specific insurance to know the inclusions, exclusions and waiting periods for extras. This can be so annoying, especially if you need cover for the $800 root canal you know you’re going to need in T-minus 1 day (yes, this was me).


On the complete flip side, some have taken a very different approach, putting away what they would pay in private health insurance into a savings account instead. Whilst this seems like a good idea in theory, there’s a simple answer why it’s not – TAX, and then MONEY.


If you earn over $90,000 before tax and you don’t have private healthcare, you will be slapped with a Medicare Surcharge bill at the end of the financial year. At the lower end, this is around $1,300. And when you compare to the $1,800 you’re paying per year in Insurance, it seems like a no-brainer, right? Wrong. In this scenario, you will need to have $1,300 + the cost of any other medical costs available in cash at any moment. What if your appendix burst at $5,000 an operation or worse, you needed a cancer-related surgery, do you have a lazy $5,000 – $50,000 lying around?


Something to think about…


financial minimalism new black

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Life Insurance

Typically, your Superannuation will include three types of insurance, 1. Death cover (also known as life insurance), 2. Total and Permanent Disability Insurance, and 3. Income Protection. A few things to keep in mind:


Life insurance through your super usually ends at around age 65-70 and the premiums are taken out of your super earnings, so you don’t need to come up with the cash to pay for it separately.


The biggest question you need to ask is, “If I become unwell, or I’m no longer able to work due to death or injury, is there enough in my Super Life Insurance Policy to cover my family’s mortgage and other bills?” If it’s not, this is when you need to find out how much it will cost to increase the cover in your superannuation or get additional cover outside of it.


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If I’m honest, at my age and with my circumstances, I won’t be getting external cover. I don’t think it’s needed for me. But the most important lesson out of all of this is to know exactly what you’re covered for and know it in every little detail!


Fearless Female Traders


[Disclaimer: The information in this blog is the opinion of the author only and does not take into account your personal and financial situation. If you have specific questions relating to your own Insurance, you should always seek professional advice. I am not a qualified Doctor, Finance Specialist or Insurance Specialist].

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