Switching private health insurance can save everyone money, but new terms and conditions relating to cancelling policies may trigger penalties.

Why do I need to think about switching now?

Basically, it’s more about planning your switching strategy now.

This is what you need to know: there are new terms and conditions relating to cancelling your contract across the providers. This means you will be penalised if you switch mid-contract.

So bearing in mind there is a new private health insurance provider in the market since the start of July (Glohealth), if you’re one of the existing 2.1million private health insurance customers and you’re now thinking of reviewing your policy and switching or if you just want to leave to save money; be careful.

In June last year the VHI changed its cancellation policy: If you’re a VHI customer and you leave before your contract is up you’ll have to pay the health insurance levy of €285 for adults and €95 for children (calculated on a pro-rata basis) and an admin fee of €50. If you’ve had a claim paid you’ll have to pay the outstanding premium due until the renewal date.

So, the message to VHI customers is: do not switch mid-contract.

On June 18 this year Laya – formerly Quinn Healthcare - changed its cancellation terms: If you have joined Laya or renewed your policy after June 18 after that date and you cancel now you’ll have to pay the balance of the premium owed up until the renewal date.

So, the message to Laya customers is: you can switch without penalty only if you joined or renewed prior to June 18 this year. Otherwise you’ll have to wait until the contract period is up to cancel if you want to avoid penalties.

On August 1, Aviva also changed its cancellation terms: For new and renewing customers, if you cancel mid-term you’ll pay an admin fee of €25 plus the health insurance levy on a pro-rata basis.

So, the message to Aviva customers is if you join or renew with them now you won’t be able to cancel without penalty until your contract period is up. If you joined or renewed before yesterday, you’re okay.

Glohealth policies also last for twelve months and if you cancel mid-year you will have to pay the health insurance levy (on a pro rata basis?). If you’ve paid the full year up front and cancel mid-term you won’t be refunded. So take this into account if you are signing up now.

Note: If you are a health cash plan with HSF there are no penalties for cancelling.

What to do

Dig out your private health insurance policy and get the date on which it expires. Then make a month or few weeks before that a red-letter day on your calendar. On that day you start shopping around so that you can cancel and switch (or just cancel) at the renewal date and not incur any penalties.

The exception to this is if your contract with Laya started before 18th June this year and with Aviva started before yesterday.

Can I get help on choosing the best policy?

Yes - there is a regulator and it has an excellent website to compare and contrast prices.

It is the Health Insurance Authority and its website is www.hia.ie

With hundred of policies to choose from across the providers, it can be difficult to compare both price and policy cover.

Remember though that you can switch health policy and that health care companies are obliged by law to make any policy available to you even if it sounds like you might not be eligible. So for example, a policy for teachers or doctors might be cheaper than the policy you are on and you may not belong to either of those professions, but you can still avail of this policy.

Similarly you might be a sole trader and work for your self but you can still avail of a company policy.

Health care insurance policies are among the most complicated you will ever come across. The Health Insurance Authority which has all the up to date prices and a useful calculator to help you work out what is best for you.

Also remember, as with all policies, increasing the excess you are willing to pay yourself in the event of an accident or emergency, may reduce your regular premiums. It is a risk – are you willing to fork out €500 or €1,000 before claiming? Nontheless it is a risk that should be considered.

Read more about what policies you are entitled to have

If you want to read more about changing your policy and what your rights are read this:  Save hundreds by switching health care plan. It is dated 2011, but your general rights are still the same as they were then.