Excess
An excess is the amount you agree to pay towards an eligible claim before your health insurer contributes the remaining approved costs.
An excess is your contribution towards the cost of an eligible claim. When you choose a health insurance policy, you may have the option of selecting an excess amount, such as $250, $500 or $1,000.
For example, if you have a $500 excess and require eligible surgery costing $12,000, you would pay the first $500 and your insurer would generally pay the remaining eligible costs, subject to your policy terms and conditions.
Choosing a higher excess often reduces your insurance premium because you're agreeing to contribute more if you need to make a claim. On the other hand, selecting a lower or nil excess usually means paying a higher premium but less out of pocket when you claim.
Not every claim will necessarily require you to pay an excess. This depends on your insurer, the type of claim and the benefits included in your policy. Some insurers also apply an excess once per policy year, while others apply it to each eligible claim.
When choosing an excess, it's worth considering what you could comfortably afford if you needed unexpected medical treatment. Finding the right balance between affordable premiums and potential claim costs is an important part of selecting the right health insurance cover.
Why It Matters
An excess can have a significant impact on both your premium and what you'll pay if you need to claim. Understanding how your excess works helps you choose a policy that suits both your budget today and your financial situation if unexpected medical treatment is needed.
Common Misunderstandings
"A higher excess means less cover."
Not necessarily. A higher excess changes how much you contribute towards a claim, but it doesn't automatically reduce the benefits your policy provides.
"I'll have to pay my excess every month."
No. Your excess is only payable when an eligible claim is made, not as part of your regular premium.
"Every claim has an excess."
Not always. Whether an excess applies depends on your insurer, policy and the type of claim being made.
"Choosing the lowest excess is always the best option."
Not necessarily. A lower excess usually means higher premiums, so it's important to choose an option that fits your overall budget.
FAQs about Excesses
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Many insurers allow you to change your excess, although this may affect your premium and could require underwriting depending on the change.
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It depends on your insurer and policy. Some apply it per claim, while others apply it once per policy year.
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In many cases, yes. Choosing a higher excess generally results in a lower premium.
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The right excess depends on what you could comfortably afford to pay if you needed to make a claim.
Choosing the right excess is about finding the balance between affordable premiums and manageable out-of-pocket costs. If you're unsure which option is right for you, a New Vision Financial Services adviser can help you compare your choices and explain how different excess options may affect your cover.