Insurance in Australia: What You Have and What to Add
Public cover in Australia, how much life and income cover fits you, and plain pros and cons of each type of insurance. Private, free calculator.
How Cover Works in Australia
Medicare covers public hospital care and subsidises doctors. Private hospital cover is optional but has tax rules that push higher earners towards it, and much life cover sits inside super.
What You Already Have
Medicare
Free treatment as a public patient in public hospitals, and rebates for doctor visits and many tests.
Subsidised prescription medicines. Since 1 January 2026 a general patient pays at most $25 per PBS script, concession card holders much less, with a safety net for heavy users.
Health cover If your income is above the Medicare Levy Surcharge threshold ($105,000 single or $210,000 family for 2026-27) and you have no private hospital cover, you pay an extra 1 to 1.5% tax. Buying hospital cover after the 1 July following your 31st birthday also adds a Lifetime Health Cover loading of 2% a year. Extras cover is optional.
Types of Insurance, Pros and Cons
Private Hospital Cover
Pays for treatment as a private patient, choice of doctor and shorter waits for elective surgery.
Pros
Avoids the Medicare Levy Surcharge above the threshold
Avoids the Lifetime Health Cover loading if bought early
Shorter waits for planned surgery
Cons
Gaps and excesses still apply
Lower tiers exclude many treatments
Premiums rise every April
Extras Cover
Partly pays for dental, optical, physio and similar services.
Pros
Useful for regular dental or physio
Some funds give free check ups
Simple to claim
Cons
Yearly limits are low
Often costs more than you claim back
Does nothing for tax
Life Cover
A lump sum to your family if you die or are diagnosed with a terminal illness.
Pros
Often already inside super
Cheaper inside super because premiums come from pre tax money
Can clear the mortgage
Cons
Default super cover may be too low
Premiums inside super reduce your retirement balance
Cover can lapse if the account goes inactive
Total and Permanent Disability
A lump sum if you are unlikely ever to work again.
Pros
Pays for care and home changes
Often bundled with life cover in super
Large amounts available
Cons
Own occupation definitions are rare inside super
Claims can take time
Tax can apply on payouts from super under 60
Income Protection
A monthly benefit while illness or injury stops you working.
Pros
Protects your income, not just a lump sum
Premiums outside super are generally tax deductible
Covers illness and accidents
Cons
Benefit periods and waiting periods change the price a lot
Inside super, benefits may stop after two years
Self employed income can be hard to prove
Checked October 2026. Rules and amounts change, so confirm on the official page before you rely on a figure. Who to check with in Australia.