Published May 28, 2026
As per the recommendations of Commonwealth Ombudsman, if you choose to terminate your policy, then you have every right to get a refund of your premiums that you have prepaid. This may have some administration fee or charge associated with it, which will solely depend on your respective insurance provider.
Steps involved in the cancellation of your health insurance
Cancellation of your health insurance is a pretty simple task. Depending upon your respective provider, you may require to either inform them via telephone calls or use their website or online form to inform them about your intention of terminating the policy.
In case you terminate your health insurance plan to change your health insurance provider, you can demand a clearance certificate from your previous insurance company. Clearance certificate is a document that reflects the record of your health insurance coverage. It is used to prove your eligibility of completing waiting period, hence there will be no further requirement of serving your waiting period with your new insurance policy.
When would you want to cancel your health insurance cover?
There are numerous reasons for which you may need to think about canceling your private health insurance. Your premiums may have increased just enough to convince you to cancel your health insurance plan, or you may find yourself unhappy with your current insurance plan. If you have reached the conclusion that you can do without private health insurance anymore, here are certain things you can consider when you choose to cancel your insurance plan.
What should you think about before canceling private health insurance?
If you simply choose to cancel your private health insurance without subscribing to any new plan, you will leave yourself with an unprotected gap period. It will mean that you will have to serve a waiting period once again whenever you subscribe to any new private health insurance. There will be extra costs involved for you whenever you decide to go back to private health insurance.
| Factor | What to Consider Before Cancelling |
|---|---|
| Waiting Periods | You may need to re-serve waiting periods later |
| Lifetime Health Cover Loading | Premiums may increase if you stay uninsured |
| Public vs Private Hospital Access | Public care remains available but wait times can be longer |
| Switching Providers | A clearance certificate helps transfer benefits |
| Premium Costs | Compare cheaper plans before cancelling completely |
Waiting periods
A waiting period is the initial waiting period following enrolment in a private health insurance policy in which there is no entitlement to a benefit under the particular service. The maximum waiting periods allowable by private health insurers under the provisions of the Private Health Insurance Act 2007 are 12 months for obstetrics and pre-existing condition cover, and two months for all other cases.
Loading on Lifetime Health Cover
This is an arrangement created to motivate young Australians to subscribe to and keep their hospital cover plans. Should you fail to have hospital cover prior to the 1st of July after you turn 31 years old, a 2% loading is applied to your premiums annually from that point on until a maximum loading of 70% is reached. The loading is then waived once you have continuous hospital cover for 10 years.
According to the Australian Government, in case you choose to terminate your private hospital cover after your 31st birthday, you might end up paying loading charges during this period unless you qualify as being exempted or you belong to certain other special circumstances groups. Up to the date of writing this article, you are entitled to a maximum of 1094 ‘days of absence’ throughout your life span.
Public hospital coverage
In case you choose to remove the hospital cover from your private health insurance plan, you will receive assistance from the public hospital service if required to obtain any medical treatment. In spite of the advantages you have in terms of private hospital services including freedom of choice as far as the attending doctors and rooms are concerned, in case you suffer any serious illness, you will have access to services offered within the public hospital network irrespective of the cancellation made. Remember that obtaining appointments with specialists as well as treatment and surgery could take longer.
Other options other than cancelling my health insurance?
It may be beneficial for you to explore some of the other available solutions in order to keep the cover you currently have in place and at the same time spend less on premiums. Some of the things you could consider include opting for another provider or talking with your current provider about what you might be able to do.
Switching Providers
In case you feel that your current health insurance is not working out for you, then you could always consider comparing the health insurance plans and determine if there is another better plan available. In such a case, it might be recommended that you ask your current health fund to provide you with a clearance certificate. This could happen automatically on your part if you are considering switching over to another fund.
So, before opting to cancel your private health insurance policy, be sure that you consider your choices carefully to avoid facing additional waiting periods, having to pay higher premiums in the future, or losing coverage altogether. Compare Today provides you with some health insurance tips for Australia. Follow us on Facebook for further updates.
