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Lifetime Health Cover Loading (LHC)

One of the most misunderstood and confusing areas of private health insurance is Lifetime Health Cover (LHC), particularly the ‘loading’.

Lifetime Health Cover is a Federal Government initiative that aims to encourage Australians to take out Hospital cover at a younger age and to maintain that Hospital cover over their lifetime. Lifetime Health Cover is designed to penalise permanent residents who do not take out Hospital cover from July 1 following their 31st birthday as well as people migrating to Australia who are over 30 and who don’t take out eligible cover within 12 months of arriving in Australia. The Lifetime Health Cover initiative does this by adding a 2% loading to your Hospital cover for each year you delay joining after your cut-off date.

For example, if you take out Hospital cover at age 50 you will pay 30% more than those first took out hospital cover at age 30. The good news is that there is a maximum loading, the current maximum is 70% which would apply to those aged 65 years or more.

No-one likes to pay more for insurance and unfortunately the Lifetime Health Cover loading cannot be removed by the click of a button. If you have a Lifetime Health Cover loading it can only be removed by holding private Hospital cover for 10 consecutive years. Be warned though, if you cancel your Hospital cover after the Lifetime Health Cover loading penalty is removed and you go without Hospital cover for 3 years or more, then your loading will return.

Another thing to note is that if you’re considering taking out a couple or family policy, your loading will be calculated as the average of the loading of the two adults. For example, if one person has a 10% Lifetime Health Cover loading and the other person has a 0% Lifetime Health Cover loading, the total loading applied to the policy will be 5%.

If you’re 31 and trying to understand the best private health insurance options to avoid the Lifetime Health Cover loading penalty, or if you’re over 31 years old and looking to take out private health insurance for the first time, Choosewell can answer all of your questions – for free. Choosewell is a private health insurance comparator that helps thousands of customers find better value health insurance each month.

Call us today on 1300 421 154 and let us help you understand the world of private health insurance. See our Lifetime Health Cover Loading FAQ for further reading.

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