More than 1.3 million Kiwis have health insurance of one kind or another - but it comes in a dizzying array of choices.

If you can't afford to pay for basic trips to the doctor you might want a policy such as those offered by Unimed, which reimburse policy-holders for prescriptions as well as the basic costs of going to the doctor, dentist, physio, etc.

Or you might want all-singing, all-dancing insurance that covers you for even the most expensive operations.

Before selecting your choice, check if you or your partner's employer offers cover, which is bound to be good value for money, says Roger Styles, chief executive at Health Funds Association of New Zealand.

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If you have to pay for your own insurance then the most common approach is to choose an "elective surgical" policy that covers the big things such as hip and knee replacements, and cataract operations, which can cost tens of thousands of dollars.

Costs and cover varies hugely and comparing one with another can be the classic chalk and cheese equation.

When I crunched the numbers on a 35-year-old female, Southern Cross Healthcare's Wellbeing policy was the "cheapest" in the comparison table and Partners Life Private Life the "most expensive".

I put those in quote marks because when I compare the two using Quality Product Research Limited data through Quotemonster.co.nz, Partners Life won out on all but one of the eight major categories - but of course costs more.

Even comparably priced policies are not created equal. While one might have a benefit I see as essential, it may be lacking another option that is important to others.

Some people, says Alan Rafe, chief executive of Quality Product Research Limited, prefer a policy that allows them to choose their own specialist. Others might be perfectly happy with a specialist from a panel chosen by their health provider.

Like most insurance, health cover evolves and new elements are added to policies fairly regularly. For example, some insurers may allow you to travel overseas for treatment. Others may cover you for a second opinion on your diagnosis.

A big question for many Kiwis is whether they want a policy that offers medicines not available through state hospitals in New Zealand. Many policies limit you to medicines on the government approved Pharmac list even if they're recommended by your doctor.

Yet it can take a few years for new or very expensive medicines to be approved by the government.

Another dilemma is the level of cancer cover you want. And does the policy you're looking at cover reconstructive surgery after cancer, for example?

We never have enough money for everything in life, as Rafe points out. Sure you'd like the Rolls Royce of a health insurance policy with all the bells and whistles and a zero excess. Realistically you may need to make some compromises to reduce premiums.

Taking a higher excess is one such compromise. While the figures in the table are based on a nil excess, increasing that to $4000 reduces the monthly premium for the family of four from $246.73 at Accuro, for example, to $145.60.

You won't be able to claim for individual trips to a specialist for initial consultations, but if you need an important operation you can still get it on your insurance.

Another option to cut costs might be to drop the element of cover for reimbursement of specialists' visits and accept that you're insuring for hospital cover only. For the family of four that would reduce the monthly premium to $82.84.

Some providers will discount their premium if you buy other insurances such as life cover, says Rafe.

An alternative approach could be to cancel the health insurance and take out "trauma" cover, which gives you a lump sum payment should you be unable to work due to one of a list of illnesses such as cancer, heart disease and so on.

Shopping around for health insurance may mean using a broker, physically visiting each provider's website or using a search engine such as LifeDirect.

With such a complex product as health insurance it's easy to make mistakes. The biggest mistake, says Styles, is not to declare any illnesses you have currently or have had in the past.

If you don't declare these "pre-existing conditions" the insurer has the right to turn down claims and cancel the policy. Even if you declare them, some policies won't cover you for pre-existing conditions, whereas others may charge a higher premium or have a stand down period.

Another mistake, says Styles is to choose a cheap policy that can't be upgraded at a later date when your salary has risen.

If you have to buy a completely new policy rather than upgrade you won't be covered for conditions that have developed since you first took out the policy. If you'd upgraded with the same insurer you would most likely be covered.