Private Health Insurance vs Self-Fund Calculator NZ
This calculator compares paying private health insurance premiums over time against self-funding, where you invest the same money instead and build a pot to pay for private treatment yourself in New Zealand. Private health insurance buys faster access to elective surgery and specialist care than the public system, along with peace of mind, but the premiums are substantial and climb steeply as you age, so it is fair to ask whether the money might do more set aside and invested. This tool puts numbers on both sides. You enter your annual premium, the number of years to compare, the rate at which premiums rise each year, and the return you would expect if you invested the premium money instead, and the calculator shows the total premiums you would pay over the period against the pot you could build by investing the same amount. If you stay healthy, the self-funded pot is yours to keep; if you face a large or early health cost, insurance would likely have paid out more than your pot has grown to, which is the risk insurance exists to cover. Self-funding tends to suit those who can absorb that risk and use the public system as a backstop. Use it to inform the decision, not settle it, since health is unpredictable. General information, not financial or medical advice.
Self-funding keeps the pot if you stay healthy; insurance covers a large or early claim that could exceed it. A guide to the cost side, not the risk. General information only.
How it works
The total premiums paid grows your annual premium at the premium-rise rate each year and sums it over the period. The self-fund pot invests the fixed initial annual premium at your expected return each year and compounds it. Comparing the two shows the wealth you would build self-funding versus the money paid to the insurer, setting aside the value of the cover itself.
Worked example
A 4,000 dollar premium rising 4 percent a year totals about 119,112 dollars over 20 years. Investing a fixed 4,000 dollars per year at 5 percent builds a pot of about 132,264 dollars, which you keep if you stay healthy, though insurance would cover a major early claim that the pot could not.
Related calculators
- Excess Optimiser: choosing an excess.
- Retirement Healthcare Cost: future health costs.
- Underinsurance Gap: cover gaps.
- Emergency Fund: a self-fund buffer.
- Is Health Insurance Worth It in NZ: background on this topic.