Deciding what is the best and most affordable private health insurance cover can be easy if you take the time and effort to compare what the funds and insurance policies have to offer. This does not mean it will be the cheapest but at least you can compare what your options are and make an informed decision.

Just follow some simple steps to decide what the most affordable plan is for you. The following points are important tips to help you compare funds.

• What is your budget? How much can you afford to spend each month?
• Are you and your family healthy?
• Are you considering getting pregnant in the near future?
• Are you taking our private health insurance cover because of tax reasons?
• Do you have any family problems that may be inherited such as needing glasses, contact lenses, arthritis etc?

Once you have thought about those key points then:

Are you young and healthy and just need to cover yourself for accidents or dental problems?

Are you approaching retirement and thinking your health is not as good as it could be and that you might need hospital or extra insurance cover in the near future?

Are you thinking of starting a family and need cheap health insurance cover when you have the baby?

Are you on a strict budget and but think you need affordable insurance because of family medical problems?

The best way to compare private health insurance policies is by checking out some of the online sites that allow you to calculate your needs and budget. These may include iSelect or iCompare. These online companies have merged policies from some of the different companies to make it easier for you to decide.

But, be careful, don't just jump in and buy a plan online. Print out the information, grab a highlighting pen and highlight the policy options, extras provided and how much you're out of pocket expenses might be. Then compare the policies for the monthly cost, gap payments and inclusions.

Alternatively, it might be an option to visit a couple of funds in person. They may be able to offer you affordable cover and explain the different plans and options on the spot.

There is a large variety of option and it can be very confusing.

Just a big word of warning, shop around, you may not be shown all the different funds or options that are available. Several of the big websites that let you compare different plans are either paid by a small number of funds or may charge more because of taking commissions from selling you the policy.

That is the reason for this article, to warn you that shopping around, taking the time to investigate and understanding how the private health insurance system in Australia works could save you thousands of dollars over many years. It is a huge commitment and well worth taking the time and trouble to compare and decide on all your options before signing up with a fund.