10th July 2014
NO HEALTH INSURANCE? SERIOUS ILLNESS COVER CAN GIVE YOU A SAFETY NET
The news this week that Minister for Health, James Reilly, will be introducing a 2% 'loading' onto the over-35s who sign up for health insurance from May 2015 onwards is just another whammy for people already struggling with extra taxes along with wage cuts.
What other options are out there for people that can't afford to pay a couple of hundred euros every month in health insurance and definitely won't be able to pay the extra charge that's going to be levied on them? Consumers should consider Serious Illness cover for themselves and their families. It's not and never will be a substitute for health insurance but if you can't afford it, then at the very least Serious Illness cover will give you some kind of safety net and it will be a lot less. For example €100, 000 of cover for a 40 year old couple over 25 years will cost just under €100 a month with €50,000 costing about half that at c. €50 a month.
"People keep dropping health insurance because of money it's plain and simple."
In contrast, for a 40-year-old buying health insurance for the first time after May 1st next year, they will have to pay 12 per cent more than someone of the same age who is already insured and a 50-year-old will face paying 32 per cent extra.
The reality is that at the end of March, 47,000 more people had cancelled their health insurance compared to a year previously. In the first three months of 2014 alone from January-March, 21,000 extra people did not have health insurance any more – that's a staggering 1,600 people a week in cancelling their policies this year. And now the government wants to penalise people even more if they do want to or can even afford to pay for health insurance?
Serious Illness cover as an option
If considering a Serious Illness as an option make sure that you check what illnesses are covered by your policy or the provider you are looking at as there is not uniformity among the life companies in terms of the illnesses they cover. The golden rule is to closely compare the illnesses covered by competing insurance companies and buy the one with the most extensive coverage of illnesses. Whilst heretofore the sale of serious illness cover often accompanied an important life event, such as buying a house or having children the increasing cost of health insurance may now be viewed as another catalyst for people to consider it but ‘beware of greeks bearing gifts’ .
Like Bank Of Ireland's promise to pay your stamp duty – of course they will when you have to sign up with them for all your life insurance etc – don’t be stampeded into taking out a serious illness policy when banks try and tell you to add it to your mortgage protection life assurance cover . Banks are tied agents linked to one life company (all the banks and 123.ie are linked to Irish Life bar Bank of Ireland which owns New Ireland) so its very unlikely that the consumer is getting the best available offer from the total insurance market.
Whilst understanding the rationale for wanting to encourage younger people to take up health insurance, one shouldn't also forget that the unemployment rate for Ireland's under-25s stands at one-in-four (24%) - the very constituency that over the next few years they want to be signing up for health insurance. People keep dropping health insurance because of money it's plain and simple. As a business owner I believe in the market and surely any issues in the health insurance industry should ultimately be market driven? It's interesting to note that the current number of private health policies in Ireland is just over 44 per cent of the population or 2,031,000. Contrast that to the UK where just 11% of the population has private health insurance
Since 2008, 300,000 people have cancelled their health insurance policies and this latest levy will surely only push more people into an already straining public system?