Do I need private health insurance?

It isn’t compulsory: Medicare covers treatment in public hospitals. But private hospital cover can save you money if you earn over $105,000 as a single in 2026–27, because of the Medicare levy surcharge, and taking it out by 31 avoids the Lifetime Health Cover loading.

What is the Lifetime Health Cover loading?

An extra 2% on your hospital cover premium for each year you’re over 30 when you first take it out, up to 70%. You avoid it by taking out cover by the 1 July after your 31st birthday, and it’s removed after 10 years in a row of cover.

Does my super include insurance?

Often. Many funds give members life and TPD cover, and sometimes income protection, paid from your balance. It isn’t automatic if you’re under 25, your balance is under $6,000 or your account has been inactive for 16 months.

Is income protection insurance tax-deductible?

Usually, if you hold it outside super and pay the premiums yourself. Any benefit it pays is taxed as income, like the pay it replaces.

Do I need an extended warranty?

Usually not. Under the Australian Consumer Law, products must be of acceptable quality, so if something is faulty you’re entitled to a repair, replacement or refund, often for longer than the maker’s warranty.

Insurance basics in Australia: what you need, what to skip

Your income

If you can’t work, permanent employees get paid sick leave, and workers’ compensation covers injuries at work. Casuals usually get no sick leave. After that, you may be able to get a Centrelink payment, which is far less than most people earn.

Income protection insurance pays up to about 70% of your income for a set period if illness or injury stops you working. Premiums you pay yourself, outside super, are usually tax-deductible.

You may already have some cover through your super fund: life, TPD (total and permanent disability) and sometimes income protection, paid from your balance. Funds can’t give you default cover if you’re under 25, your balance is under $6,000, or your account has been inactive for 16 months, unless you ask for it. Check what you have in your fund’s app before buying more.

Health

Medicare covers treatment in public hospitals and much of the cost of seeing a doctor. Private hospital cover affects your tax. Extras cover, for dental and physio, doesn’t count:

Without hospital cover, singles earning over $105,000 (families over $210,000) pay the Medicare levy surcharge of 1% to 1.5% of their income in 2026–27.
Lifetime Health Cover: if you take out hospital cover after the 1 July following your 31st birthday, you pay 2% more for each year you’re late, up to 70%, removed after 10 years of cover.
The private health insurance rebate cuts your premium, less as your income rises.

Lifetime Health Cover loading Extra on the hospital part of your premium, by your age when you first take out cover

Age 30: None
Age 35: +10%
Age 40: +20%
Age 45: +30%
Age 50: +40%
Age 55: +50%
Age 60: +60%
Age 65: +70%

2% more for each year you wait after 30, up to 70%

Age 30 means taking out cover by the 1 July after your 31st birthday. The loading is removed after 10 years in a row of hospital cover.

Life insurance

Life cover pays out if you die, and TPD if you can never work again. Default cover in super is a cheap start, but check the amount: it’s often lower than you need. Trauma cover, which pays a lump sum if you’re diagnosed with a serious illness, can only be held outside super.

A common starting point is enough to clear your debts and cover your family’s living costs for several years.

Home, contents and car

Compulsory third party (CTP) insurance is needed to register a car, but it only covers injuries to other people. Damage to other people’s cars needs third party property cover at least, and comprehensive cover protects your own car too.

Your lender will require home (building) insurance. If you rent, contents insurance covers your belongings, and is usually cheap. Check your sum insured each year, so you’re not underinsured after a rebuild costs more.

What you can usually skip

Extended warranties: the Australian Consumer Law already entitles you to a repair, replacement or refund if a product is faulty, often beyond the maker’s warranty. An emergency fund covers the rest.
Cover you already have: check what your super, credit card and existing policies include, such as travel insurance on some cards, before buying more.
Low excesses: choosing a higher excess lowers your premium, if you could pay it.

Paying less, and complaints

Shop around at renewal, rather than letting a policy roll over. Compare the renewal price with last year’s.
Answer questions honestly on applications: a claim can be refused or reduced if you didn’t mention something you were asked about.
Review your cover when life changes: a new job, partner, baby or home.

If an insurer refuses a claim and you disagree, complain to the insurer first, then to the Australian Financial Complaints Authority (AFCA), which is free.