Private health insurance companies are legally required to save at least 10% of the insurance premium for the future. This saving is called retirement provisions.
The insurer uses the retirement provision to keep the private insurance cost stable as you age.
Health problems increase with age, so older members of the insurance cost more than young ones. So, to keep the premiums of older members affordable, private health insurance providers build retirement provisions.
The insurer uses the funds from retirement provisions to keep the insurance premium affordable in old age.
The earlier you join the private healthcare system, the more time you’ll have to build the retirement provision. This is why we recommend joining private insurance when you are young.
