What is health insurance excess in New Zealand?

Health insurance excess (also called a deductible) is the amount you pay out-of-pocket before your insurance coverage kicks in for a claim. It's your contribution towards each claim you make. For example, if you have a $500 excess and need surgery costing $8,000, you pay the first $500 and your insurance covers the remaining $7,500. Higher excess typically means lower monthly premiums, while lower excess means higher monthly premiums.

How much excess should I choose for my health insurance?

Choose an excess amount you can comfortably afford to pay if needed. Consider your financial situation and health. If you're young and healthy with $1000+ in an emergency fund, consider higher excess ($1000+) to save on premiums. If you have health conditions or money is tight, consider lower excess ($250-500) as you're more likely to need care. The most popular choice is $500, which offers a good balance of premium and out-of-pocket costs.

When do I have to pay health insurance excess?

Excess usually applies to hospital admissions, surgical procedures, emergency department visits, some specialist consultations, and diagnostic procedures like MRI or CT scans. It typically doesn't apply to preventive health screenings, some specialist consultations, physiotherapy sessions, psychology consultations, GP visits (if covered), or prescription medications. Check your specific policy for details.

Do I pay excess for every claim I make?

Yes, excess typically applies per claim event. For a single health issue requiring multiple treatments (like surgery with follow-up care), you usually pay excess once. However, for separate unrelated health issues, you pay excess for each claim. For example, if you need gallbladder surgery and later skin cancer removal, you would pay your excess amount twice - once for each separate claim.

Can I change my health insurance excess amount?

Yes, you can usually change your excess amount when renewing your policy or sometimes during the policy year. Review your excess choice annually as your financial situation and health needs may change. Increasing your excess can significantly reduce your monthly premiums, while decreasing it will increase premiums but reduce out-of-pocket costs when making claims.

How does excess affect my insurance premiums?

Higher excess leads to lower monthly premiums, while lower excess results in higher premiums. For example, a 35-year-old with comprehensive coverage might pay $120/month with $0 excess, $95/month with $500 excess (saving $300 annually), $85/month with $1000 excess (saving $420 annually), or $70/month with $2500 excess (saving $600 annually). The right choice depends on balancing premium savings against potential out-of-pocket costs.

Health Insurance Excess Guide NZ 2025

What is Health Insurance Excess?

Health insurance excess (also called a deductible) is the amount you pay out-of-pocket before your insurance coverage kicks in for a claim. It's essentially your contribution towards each claim you make.

Example:

If you have a $500 excess and need surgery costing $8,000, you pay the first $500 and your insurance covers the remaining $7,500.

Key Point:

Higher excess = Lower monthly premiums
Lower excess = Higher monthly premiums

Common Excess Amounts in NZ

No Excess

Highest premiums, no out-of-pocket costs

$500

How Excess Affects Your Premiums

Excess Amount	Monthly Premium Example*	Annual Savings	Best For
$0	$120	-	Frequent users
$500	$95	$300	Most people
$1,000	$85	$420	Infrequent users
$2,500	$70	$600	Emergency only

*Example for 35-year-old with comprehensive coverage

When Does Excess Apply?

Excess Usually Applies To:

• Hospital admissions (per admission)
• Surgical procedures
• Emergency department visits
• Specialist consultations (some policies)
• Diagnostic procedures (MRI, CT scans)
• Day surgery procedures

Excess Usually Doesn't Apply To:

• Preventive health screenings
• Some specialist consultations
• Physiotherapy sessions
• Psychology consultations
• GP visits (if covered)
• Prescription medications

How to Choose the Right Excess

Consider Your Financial Situation

Choose an excess amount you can comfortably afford to pay if you need to make a claim. There's no point saving on premiums if you can't afford the excess when needed.

If you have $500 easily available:

Consider $500 excess

If you have $1000+ in emergency fund:

Consider $1000+ excess

If money is tight:

Consider lower excess

Think About Your Health

If you're young and healthy:

• Consider higher excess ($1000+)
• Save on monthly premiums
• Lower chance of making claims

If you have health conditions:

• Consider lower excess ($250-500)
• Higher chance of needing care
• Multiple claims may add up

Understanding Multiple Claims

Important: Excess Applies Per Claim Event

Scenario 1: Single Health Issue

Example: You need knee surgery requiring:

• Initial consultation: $300
• MRI scan: $800
• Surgery: $15,000
• Physiotherapy: $1,200

Total cost: $17,300
You pay: $500 excess
Insurance pays: $16,800

Scenario 2: Separate Health Issues

Example: You have two unrelated issues:

• Gallbladder surgery: $8,000
• Later: Skin cancer removal: $3,000

Total cost: $11,000
You pay: $1,000 excess (2 × $500)
Insurance pays: $10,000

Tips for Managing Your Excess

Build an Emergency Fund

Set aside money specifically for health emergencies. Aim to have at least your excess amount readily available.

Payment Plans

Many hospitals and specialists offer payment plans for excess amounts. Ask about options when booking treatment.

Review Annually

Review your excess choice annually. Your financial situation and health needs may change over time.

Find the Right Balance for Your Needs

Compare health insurance plans and excess options to find the perfect balance of premiums and out-of-pocket costs.

Compare Plans & Excess Options Calculate Your Costs

Health Insurance Excess Guide