Health Insurance Excess: Three Things Most People Get Wrong

“If I use my insurance, do I have to pay the excess first?”

It is one of the most common questions I get about health insurance, and the answer is no. An excess is triggered by surgery and hospital admissions. Specialist appointments and diagnostic tests are, on most products, paid in full. And it applies at most once a year, not every time you see a doctor.

This matters because people who misunderstand it sit at home with symptoms rather than get them looked at — paying for a policy and then refusing to use it.

Misunderstanding 1: “Using my insurance at all means paying the excess”

No. Take an AIA health policy with a $1,000 excess. Specialist consultations and diagnostic tests are covered in full, with nothing out of your pocket. The $1,000 only applies when a procedure is involved — surgery, a hospital admission.

Misunderstanding 2: “I pay it every time”

No. The excess applies once per policy year at most, not once per procedure. Two operations in the same policy year still means one excess.

Misunderstanding 3: “All insurers work the same way”

They do not, and the differences are significant.

• AIA: specialists and diagnostics do not trigger the excess. Surgery and hospital admissions do.
• nib: diagnostic costs over $3,000 trigger the excess. Also worth knowing: from 24 November 2025, some nib policies added a 20% co-payment on specialist consultations and diagnostic tests (tests listed in the Diagnostics Schedule are excluded, and Ultimate Health Max is unaffected because of a guarantee in its wording). nib’s own worked example: on a $2,000 CT scan, the 20% co-payment takes $400, then a $500 excess comes off the remaining $1,600, so you pay $900 and nib pays $1,100 (nib policy update).
• Southern Cross: procedures such as colonoscopies and gastroscopies attract the excess.
• Partners Life: on top of the surgical excess you choose, there is a separate $250 excess on specialists and diagnostics, applied at most once every 12 months. So it is fair to say that with Partners Life, using the policy costs you $250 — but their premiums are discounted to match, so it is not worth agonising over.

So what excess should I set?

It depends on your premium, your budget and how much risk you are comfortable carrying. For adults, setting an excess is usually the better deal: on some products a $500 excess buys around a 25% premium discount, and most people do not have surgery or a hospital admission in a given year. For children it needs looking at case by case.

If you are not sure, send me your policy and I will tell you exactly when its excess is triggered.

Once you know how your excess works, the next question people ask is whether claiming pushes next year’s premium up. It does not.

Want to know how the excess on your own policy works? Get in touch with Cornerstone Insurance.

Phone: +64 211 280 727 Email: amy.tao@cornerstonefs.co.nz WeChat: Amytaoingrace