Historically, comparing health insurance plans from different providers has been extremely difficult. The main guide has traditionally been that you get what you pay for, and whilst this is largely true, it is a gross oversimplification and far from the total picture.
To overcome this difficulty we have developed the Benefit Index, which is unique to this site. The index grades all the policies we offer with a simple percentage figure thereby allowing you to easily and directly compare different plans. We also provide a simple summary highlighting the areas of strength and weakness in each plan.
We will discuss in more detail below how the Benefit Index is calculated, however we would recommend that when considering what plan is right for you, choose a plan with the highest Benefit Index within your budget.
Before considering the benefit index let us first give some thought to the primary reason that people have health insurance. That is simply, so they do not get an unpleasant financial shock from medical bills in the event of an unforeseen illness or accident.
In defining the importance of any particular benefit on a health insurance plan, we need to consider:
In some cases, this is quite easy. For example, a maternity benefit clearly only has a value to females of childbearing age and as most hospitals publish the cost of their childbirth package, if all goes well, there are no surprises. At the other end of the scale, if you are unfortunate enough to be involved in an accident, the range of medical services you may need could well end up being very extensive (and expensive)!
In developing the Benefit Index, we analysed numerous health insurance plans and picked out a range of common benefits that met the criteria of potentially saving policyholder a very significant amount of money. Regrettably however, the extent of the cover offered by these apparently similar benefits often varies tremendously between different plans. A good example is that of an organ transplant,
Generally however, you have to dig deep into the small-print of the policy to find exactly what is covered. Experience shows that most people will not do this digging at the time of purchase, a fact that some will inevitably come to regret later on!
The Benefit Index is shown as a percentage figure for a particular plan and is shown as part of the list of results that is presented when a quote is requested. Hovering your cursor over that figure (or tapping if you are on a tablet or smartphone) will produce a summary table similar to that shown.
Each parameter is allocated a score in proportion with its potential cost to the policyholder. Where the parameter scores the maximum, a green tick is shown. Where no cover is provided at all, a red cross is shown and where the cover is an option at additional cost, an orange “O” is shown and one point only is allocated to the score. In this case the benefit index could be increased by purchasing the optional additional cover.
Except in the case of the overall maximum benefit of the plan, where the cover is limited to a specific sum, the points allocated are calculated in proportion to the maximum benefit available from any of the plans reviewed. For example; say a particular parameter has been allocated 10 points and the maximum available cover from any plan is $100,000, then a plan offering only $50,000 of cover will be allocated 5 points. The result will be shown in the summary as 5 / 10.
The individual scores are added together to calculate the benefit index percentage for the plan.
In the case of the maximum benefit, cover offered by different policies ranges from $250,000 p.a. to $9.75m p.a. In this case the benchmark figure of $1.0m is used for the purpose of comparison and any plan providing cover of $1.0m p.a. or above will score the maximum points. If the cover is for the lifetime of the policy rather than p.a. the point score is halved.
Earlier, we recommended that you choose the highest benefit index your budget will allow. We would further recommend that if possible, this should be above 75%, to ensure you have adequate cover. You can make use the Benefit Index breakdown to understand where the chosen plan is deficient and the “Plan details” link to get more detailed information and then use this to make a decision about your own personal circumstances. For example, a plan that provides a maximum cover of $250,000 p.a. will score only 2.5 points out of a possible 10, but depending on where you live this may well be quite adequate. Similarly, if you opt for a plan with no outpatient cover it will have a lower benefit index, but in many parts of the world outpatient costs are predictable and relatively low, so you may consider that no outpatient cover is an acceptable compromise.
The main thing to remember about the Benefit Index is that it is simply a tool designed to be a quick and easy guide and assist you in making your decision. The Benefit Index does not seek to give advice or give any recommendation as to which plan you ultimately select.
We would recommend you use the Benefit Index to help choose the most suitable plan(s), but you should still read the detail in manufacturer’s literature to verify which plan is right for you. Manufacturer’s literature can be downloaded by following the “More info” link.