Lifetime Health Cover (LHC) is a Government initiative designed to encourage people to take out hospital insurance earlier in life and to maintain their cover.
Like many government ‘incentives’, it’s actually in the form of a penalty.
If you do not have hospital cover with an Australian registered health fund on the 1st July following your 31st birthday and then decide to take out hospital cover later in life, you will pay a 2% loading on top of your premium for every year you are aged over 30. The maximum loading is 70%.
For example, if you take out hospital cover at age 40 you will pay 20% more than someone who first took out hospital cover at age 30.
Once you have paid a LHC loading on your private hospital insurance for 10 continuous years, the loading is removed as long as you retain your hospital cover.
In some cases you may be exempt or fit into a special circumstances category.
If you need more information, give Noel or Erina a call at the office on (03) 9585 7555 oremail us.