Think for moment about the difference between long and short haul flight. If you’re on short haul flight – say Auckland to Wellington – then you don’t really have lot of time to consider the experience, to notice if the seat is uncomfortable or that you haven’t had hot drink during the 50-minute flight.
In contrast, on flight from Auckland to London your needs are that much greater and so is the level of comfort and service you require. Spend more than four hours flying in economy and you soon understand why those who can afford it opt to travel up the front of the plane or pay more for extra leg room.
Well, insurance isn’t that much different. Car insurance policies, for instance, are pretty simple and standard and if you decide to move insurers chances are you’ll take any no-claims bonuses with you.
But when it comes to some of the bigger insurances – such as life and health – cheapest isn’t always the best. You need to be in it for the long haul… swapping planes in mid-flight is not recommended!
As consumers we’re actively encouraged to shop around for the best deal. However, when thinking about switching insurers it’s important that people consider the benefits they can lose by changing on the basis of price alone.
With health insurance the new insurer re-evaluates the individual’s medical history and that may show very different picture than the one the original insurer had.
Say for example, you claimed for endometriosis treatment or the removal of benign bump while with Insurer A. When you go to sign up with Insurer B you find that you won’t be covered for treatment relating to either of these conditions or, if you want to be, you may have to pay higher premiums.
Karen Stevens, Insurance and Savings Ombudsman, told the NZ Herald earlier this year that consumers need to be very sure they understand why they are changing products or product providers.
“Think very carefully before changing your health, life or disability cover – only do so if you make absolutely sure you will be in better position with the new cover. Cheaper premiums may end up costing you more, if your policy is voided for non-disclosure.”
Many New Zealanders are introduced to health insurance through an employer scheme. Of all the benefits in remuneration package, health insurance is the one that employers will likely see the most tangible benefits from: healthy staff at work, rather than endless rounds of sick leave while waiting to see specialist, or living in chronic pain waiting on the public list for surgery.
For this reason the choice of health insurer should be made with long-term view.
It’s not often I say it, but sometimes no change is good. So take the time at the start of your life-long journey to make sure the plane you get on is the right one for you. M
Peter Tynan is chief executive of Southern Cross Health Society.