Private health insurance

Private health insurance
What it is, how it works and where to buy

The National Health Service (NHS) offers complete healthcare to everyone, no matter their financial situation. However, if you prefer to go for private medical care, health insurance comes into play, though it can be expensive. It typically covers scheduled appointments, treatments, and surgeries such as hip replacements, cataract procedures, or ear treatments. Choosing private care is a personal decision, but it comes with a price tag. This guide outlines how private health insurance works, what to be aware of, and tips on minimizing costs.

1-min read on finding private health insurance

You can save £100s by comparing policies to find the most affordable option. Here’s a brief overview for those who know what they’re looking for and simply want a low-cost policy (for further guidance, check out our complete guide below).

1. If you’re certain about what you need and don’t require guidance, use comparison websites to evaluate prices. By filling out a single form, you can receive multiple quotes. However, you’ll have to compare the coverage details on your own to find the most suitable policy for your needs. Keep in mind that pre-existing medical conditions are typically not included.

If time permits, we recommend reviewing both comparison sites:

• MoneySupermarket (the link takes you to details of its £120 voucher offer)
• Howden Life & Health (the link takes you to details of its £100 cashback offer)

If you’re generally in good health and stay active, some insurance companies provide discounts and perks for maintaining your fitness. Major providers like Vitality, Bupa, and Aviva offer these benefits. Be sure to check for them when comparing policies or explore further details about the rewards available.

2. If you require expert guidance, such as when dealing with complex medical issues, a broker can suggest a tailored policy. This process typically takes more time but results in a more personalized quote. While some brokers may charge a fee, it must be clearly stated in advance. You can locate a broker through the AMII trade association.

Who is this guide for? This guide is for anyone seeking private healthcare services that fit their schedule and location. If you’re only interested in reimbursing expenses for optical, dental, or physiotherapy, check out our guide on healthcare cash plans.

What is private health insurance?

Private health insurance, also known as private medical insurance (PMI), is a type of policy designed to cover the expenses of private healthcare if you fall ill. It operates alongside the NHS and typically offers benefits like reduced waiting times, a choice of medical facilities, and access to treatments that are exclusively available privately.

You make regular monthly payments to the insurer, and in return, they cover the costs of certain private medical treatments, such as consultations or surgeries, that you might require during the policy period.

What does and doesn’t it cover?

Health insurance aims to provide coverage for non-routine tests and treatments related to acute conditions. These conditions are typically serious but treatable, and they generally have a short duration, emerging only after your policy starts.

As a result, many chronic conditions (which are usually long-term and incurable, like arthritis or asthma), along with any pre-existing conditions before your policy is activated, are typically excluded.

The specific medical treatments included in your coverage will differ based on the policy and cost, but here are some examples:

• Tests or surgery as an inpatient (where you need to stay in hospital)
• Hospital accommodation and nursing care
• Consultations, tests and therapy as an outpatient (no stay required)
• Medicine or drugs not available on the NHS

Basic insurance plans typically cover essential medical treatments, while more comprehensive policies may also provide access to specialist therapies and medications.

Commonly covered conditions include musculoskeletal issues like short-term back pain, digestive disorders such as gastroenteritis, heart and circulatory problems like coronary heart disease, as well as eye and ear conditions, including inner ear infections.

If diagnostic tests reveal a chronic condition, the initial tests are generally covered, but ongoing treatment usually isn’t. For example, if you showed symptoms of diabetes and were referred to a specialist for diagnosis, your policy would likely cover the testing. However, once diagnosed with diabetes, the cost of treatment, medication, and regular check-ups would no longer be covered and would instead fall under the NHS.

Unlike critical illness insurance, private health insurance covers medical expenses aimed at treating your condition. In contrast, critical illness insurance provides a one-time payment to help cover income loss due to a serious health issue. The definition of a critical illness may vary depending on the policy, but it often includes conditions like Alzheimer’s disease, early-onset dementia, heart failure, hearing loss, speech loss, limb paralysis, stroke, or brain trauma.

Should I get health insurance?

Every policy is optional, so it’s essential to evaluate if the monthly expense is justified for your situation. Here are some important factors to keep in mind:

The NHS may be sufficient for your needs

Even if you have private health insurance, you’ll still rely on the NHS for services like visiting your GP or accessing A&E. Moreover, in the event of a serious illness, having health insurance doesn’t guarantee that you will receive quicker treatment compared to what the NHS offers.

For less critical health issues, however, having insurance can provide advantages such as faster referrals to specialists, along with greater flexibility regarding appointment times and locations by opting for private care instead of the NHS. Therefore, paying for healthcare can be seen as a luxury.

Consider self-insuring

You aren’t required to have insurance to seek private treatment; you can choose to cover any expenses out of pocket. Instead of paying a monthly premium to an insurance company, consider depositing that amount into a top savings account. This way, if you need medical attention, you can access your “insurance fund.” Additionally, if you don’t end up filing a claim, you retain the money.

Keep in mind that it takes time to accumulate sufficient savings, and certain treatments can be quite costly. For instance, a carpal tunnel release surgery on one wrist typically costs around £2,000, cataract surgery for one eye is approximately £3,000, while a hip or knee replacement starts at about £10,000. Therefore, the total costs for multiple treatments could easily exceed £100,000s.

Another option is to combine self-insurance with a private medical insurance (PMI) policy that has a high excess. This strategy allows you to pay a lower premium while covering less expensive medical expenses yourself, ensuring that you are still protected for higher-cost procedures like major surgeries. For more details, check out information on how PMI excesses function.

Check if you’re already covered by your employer

If you or your partner is working, it’s beneficial to check whether your employer provides individual or family private health insurance. This may sometimes be a complimentary standard benefit (although taxes could apply) or an optional plan you can pay for, typically deducted from your paycheck.

Companies often leverage their bulk purchasing power to secure significant discounts, so it’s advisable to find out the details of the cost and coverage, then compare these with the most affordable plans that suit your requirements.

However, there is an important consideration… If you require treatment and file a claim, will you be able to maintain your membership with the insurance provider under the same terms after leaving your job? If the answer is no, you might find yourself unable to get a new insurer to cover an existing health condition or face exorbitant monthly premiums to maintain that coverage.

Why do you need private health insurance if we have the NHS?

Understanding that obtaining and purchasing a private health insurance policy is a choice you can make is crucial. This type of insurance can complement the services provided by the NHS, should you require emergency treatment or ambulance services.

If you’re thinking about investing in a private medical insurance policy, you can expect to enjoy several extra advantages, including:

• Shorter waiting times which can help ease any anxiety as to when you may be treated.
• Access to specialist treatments which can include new drugs (or treatments) before they’re available on the NHS.
• Private room which can come with an ensuite bathroom and TV — but not always.

Health insurance need-to-knows

If you believe private medical insurance is suitable for you, here are six essential points to consider before choosing a new policy.

1 – You can tailor a policy to pay only for extras you need

Numerous providers offer affordable, fundamental plans that allow you to include additional services, such as enhanced cancer treatment or outpatient care, tailored to your specific requirements and financial situation. Consider your reasons for seeking private medical insurance—whether it’s to cover a wide range of possibilities or to address particular health concerns.

You can also reduce costs by limiting when you utilize the policy. Many insurers offer a ‘six-week option’ that can lower your premium. With this arrangement, if the NHS waiting time is six weeks or less, you will receive treatment through the NHS; if it exceeds that period, you become eligible for private healthcare.

You can extend your policy to cover your family

Family policies are accessible, along with specific plans for individual children, although the latter are less prevalent.

Child-focused policies are intended to address short-term health issues, similar to those for adults. It’s important to note that some plans may exclude coverage for specific conditions or only provide benefits for inpatient and outpatient hospital care, so reviewing the policy details before purchasing is essential.

Identify your family’s specific needs and ensure that the chosen policy aligns with them. Keep in mind that since most children’s treatments are available for free through the NHS, the potential claims amount may be limited.

Additionally, be cautious, as not all private hospitals are equipped to treat children. Before finalizing your purchase, verify the insurer’s hospital list to ensure they include facilities that accommodate children and that these are conveniently located.

2 – Choosing a higher excess can cut £100s off the cost, but claims could then be costly

Like most types of insurance, there’s often an excess that you must pay when making a claim. This excess represents a portion of the claim amount, and choosing a higher excess can lead to lower premiums, significantly affecting overall costs. For instance, a policy priced at £1,000 per year without an excess could be reduced to £720 annually by opting for a £500 excess.

When evaluating your insurance needs, think about what you’ll be claiming for. Are you seeking coverage for a wide range of issues, or just for significant medical events, like a hip replacement? If it’s the latter, increasing the excess can help lower your premium.

Some people choose to combine a policy with a high excess (over £1,000) with self-insurance. This approach involves setting aside savings for minor private treatments while retaining the option to claim for more costly procedures.

Once you’ve determined your strategy, you’ll typically need to choose how often to pay the excess, which is different from many other insurance types. The available options include:

• Every time you file a claim, you incur an excess fee for each individual claim. For instance, if your policy has an excess of £200 and you submit two claims, the total excess you will need to pay amounts to £400.
• You will only incur the excess charge on your initial claim. For instance, if your policy has a £200 excess and you submit two claims within the insurance year (the year following your policy start date), you will only be required to pay the £200 for the first claim. Keep in mind that this may lead to a higher premium, and not all insurers provide this option. Additionally, if the claim (or treatment) extends into the subsequent year, you will need to pay the excess once more.
• You are responsible for a portion of the claim without any excess. The insurer WPA provides a feature called ‘shared responsibility’ within its Complete Health plan, meaning you’ll contribute 25% of any claim, subject to a predetermined annual cap, instead of a set amount for each claim.

If you choose this option, ensure you have sufficient funds reserved to cover any claims you may need to file.

3 – Study any exclusions or restrictions carefully so you know what you’re covered for

Besides not covering pre-existing or chronic ailments like arthritis or asthma, your policy may have additional exclusions or circumstances that prevent you from making a claim. These often encompass treatments for cosmetic purposes, pregnancy-related issues, dental care, injuries you inflict upon yourself, or injuries sustained during high-risk activities like skydiving.

To avoid unexpected disappointments when filing a claim, it’s essential to thoroughly review your policy.

Your choice of location and practitioner could still be restricted

• Your policy will include a selection of hospitals you can visit, but opting for a wider choice can lead to higher costs. When purchasing your policy, you’ll usually select from a range of hospitals where you can receive treatment. Generally, the more extensive the hospital network you choose, the greater your premium will be. However, an extensive list of hospitals might not be necessary if there are reputable hospitals in your vicinity—so it’s advisable to verify this beforehand.
• Insurance approval is necessary for treatment. Insurers will cover the costs completely or up to the maximum policy limit for consultations, but this is contingent upon the consultant being part of their approved network.

Should you opt for a consultation with a specialist or practitioner not listed as approved, your insurer may either refuse to reimburse the expenses or only cover a portion of the costs, consistent with their usual payment limits. This could result in an out-of-pocket expense that your policy does not address.

4 – Take note of the claims process as it varies between policies

Before proceeding, it’s important to consult your insurance provider. Below is a general overview of the claims process:

a) First, obtain a referral from your general practitioner (GP) for the necessary treatment.

b) Next, register your claim with the insurance company. You will be required to provide information including your membership number, treatment date, procedure details, individual service charges, and the overall total.

c) The insurer will then verify your coverage.

d) Subsequently, your GP must refer you to a hospital that is on the insurer’s approved list, and you’ll need to keep your insurer updated throughout the entire process.

5 – Policies will be sold based on your medical history, or on a ‘moratorium’ basis

You will have the option to select either ‘full medical underwriting’ or ‘moratorium underwriting.’ This is the difference:

• If you have to disclose your full medical history at the start. This comprehensive underwriting plan outlines the specific medical conditions that the provider will either cover or exclude. In certain situations, the insurer may need to consult with your physician for additional details, which could lead to a longer wait time for coverage approval. Nonetheless, once coverage is established, future claims are unlikely to require further documentation, potentially allowing for faster processing.
• If there’s no health questionnaire.This option is known as ‘moratorium underwriting,’ which tends to be more affordable, faster, and simpler at the beginning, particularly if you’re in good health. However, the claims process can be slower, as you’ll frequently have to demonstrate that you didn’t have the condition prior to making a claim, especially if you file within the initial two years (or longer for certain conditions).

6 – If you’re thinking of switching, huge savings are possible, but BE CAREFUL if you’ve had treatments

As private medical insurance costs have steadily increased each year—often rising significantly compared to when you first signed up—conducting a comparison can uncover substantial savings. This is beneficial if you haven’t made any claims.

However, if you’ve utilized your policy for treatments in recent years and the same issue arises again within two to seven years (depending on the policy), a new insurer may classify that as a pre-existing condition and exclude it from coverage. In such cases, you might feel stuck with your current provider.

In this situation, the most effective approach is to negotiate with your existing provider during the renewal process and see if they will match the lowest price you’ve found.

How much is private health insurance?

As with any form of insurance, the key consideration is ensuring that it suits your specific needs and is appropriate for its intended purpose. Health insurance policies are particularly challenging to compare directly, as they involve numerous variables. Certain types of coverage may be included as standard in some plans, while others might offer them as optional add-ons.

The table below provides examples illustrating how quotes can vary based on factors like age and the level of coverage selected. Your personalized quotes may differ significantly from these examples.

How private health insurance costs can differ

Quotes based on a zero excess (so you’d pay nothing towards a claim).
Full(er) cover includes unlimited outpatient care and cancer treatment coverage.
(1) Prices based on healthy individuals, and being a non-smoker. Correct as of August 2024.

How to buy cheap health insurance

It’s important to always compare health insurance quotes from multiple providers. If your budget allows, paying for an annual policy upfront can often be more cost-effective, as many insurers offer discounts for this option.

However, always ensure that the policy you select aligns with your specific needs, regardless of any attractive discounts.

Here are two steps that can guide you in finding the most suitable policy at the lowest possible price.

• Use comparison sites – usually best if you know exactly what you want, you don’t need the policies explained.
• Advised route – if you’re not sure what kind of policy you need, or you have medical conditions, or you want to speak to an expert.

Step 1. Benchmark using comparisons

Use comparison platforms to evaluate private health insurance quotes.

Although well-known comparison websites advertise private medical insurance comparisons, many of them are essentially ‘white labels’ for two specialized comparison services. In other words, even if they are branded as sites like MoneySupermarket or GoCompare, the actual comparison is powered by one of these two specialist providers.

To save you time, we’ve gone straight to the experts and secured additional discounts. Some policies are shared between the two platforms, while others are unique to each. Since they may offer exclusive prices (but never more expensive than buying directly from the insurer), it’s worth checking both if you can.

Top comparison sites for private health insurance

Important: Don’t let the cashback, or voucher sway you – always make sure the policy meets your needs, and get alternative quotes to compare.

Annoyance alert: Both comparisons require you to provide your phone number, and they may reach out to you via phone or email to discuss your quote. Unfortunately, there’s no option to avoid this. It would be quite unfortunate if you happened to enter an incorrect phone number by mistake.

If you’re relatively young and enjoy working out, Vitality’s Private Medical Insurance (PMI) benefits might be worth considering—they could practically pay for the policy itself.

Vitality Healthcare* offers a PMI plan designed to motivate you to maintain an active lifestyle. In return, you can earn significant rewards like an Apple Watch at a heavily reduced cost and 50% off gym memberships. For some younger individuals who would already spend money on these kinds of expenses, the savings and perks might nearly offset the cost of the PMI plan. Key benefits include…

• Apple Watch Series 10. Vitality has consistently offered its members access to an Apple Watch. With the release of the Series 10 on 9 September, they’ve indicated that once the stock becomes available in the coming weeks, those with PMI through Vitality will have the opportunity to get the new Series 10 watch, priced at £399, for an initial payment expected to be around £39. The amount you’ll pay afterward depends on the number of ‘Activity Points’ you accumulate. For instance, achieving the highest activity level (completing 12,500 steps five days a week) means you won’t need to pay anything more. Even with lower levels of activity, you can still save a significant amount.
• Up to 50% off gym memberships at Virgin, Nuffield, and PureGym. These discounts apply directly to the monthly fees and are not tied to your activity levels. Although the discounts are based on full price rates (which some may be able to negotiate further—see advice on finding cheaper gym memberships), they still represent a significant reduction. Plus, they apply even if you’re already a member. For example, the standard price at Virgin’s Sheffield gym is £64/month, but with Vitality, you could reduce it to £32/month. Additional savings are available at brands like Caffè Nero, Nike, and Samsung.
• How to sign up with Vitality. There are two ways to get started. By using our Vitality* link, you can qualify for two months free, provided you earn enough Activity Points. For the first month, you need to earn three Activity Points and complete a health questionnaire. For the second month free, you’ll need to rack up 48 Activity Points (which could be done by walking 7,500 steps, three times per week, for four weeks).

Alternatively, you can use the links on comparison sites, which also list Vitality. This allows you to see how it compares with other providers and potentially earn additional cashback.

• How it all adds up…. We obtained quotes for a 25-year-old based in London, with a Vitality policy costing £44/month (£528/year). If they were planning to buy an Apple Watch anyway, this could save them around £120/year on payments. Additionally, as a current Virgin gym member, they’d save about £384/year on membership fees. Combined, these savings total £504, which almost covers the annual insurance cost.

In summary, while Vitality may be pricier than the cheapest available quotes (which range from £25 to £37/month depending on your location), taking advantage of these perks could make it more affordable. However, to fully maximize the benefits, you’ll need to maintain the policy for several years. Keep in mind, as with all providers, premiums are likely to increase annually.

Check other insurer perks too

Vitality isn’t the only company offering perks like discounted gym memberships, so we’ve highlighted a few other examples below. However, don’t base your decision solely on these added incentives—ensure the product provides the coverage you need at a price that fits your budget.

• Aviva’s ‘Healthier Solutions’ plan includes a feature called ‘My Health Counts.’ By signing up, completing a health questionnaire, and following the suggested lifestyle improvements, you can save up to 15% on your renewal premium in the second year. You’ll also need to log in and retake the questionnaire between six to nine months into your policy.
• Bupa provides discounts on Fitbits, gym memberships, English Heritage membership, and relaxation products.

Although we’ve included links for more details, it’s generally better to use comparison sites to apply. This way, you can also benefit from cashback or vouchers.

Step 2. Use a broker for specialist advice

For expert guidance and more tailored options, reach out to a broker.

If you’re uncertain about which policy to choose or face challenges due to specific conditions, a broker can help conduct a more in-depth search. While the process may take a little longer, you’ll likely receive a customized quote, with any exclusions clearly detailed. Brokers often have connections with a range of insurers and may even be able to offer you exclusive deals.

To locate a broker, consider using the AMII, a trade association for independent medical insurance advisors, which provides a directory of members.

Brokers can address questions about coverage, insurer practices, regulations, and more. Most don’t charge clients directly, as they earn commissions from insurers when you take out a policy. However, it’s always a good idea to confirm their fee structure before proceeding with their services.

Step 3. Switching from an existing policy? Try haggling

Health insurance premiums are not static and tend to increase over time, often on an annual basis (meaning that before long, they can be significantly higher than when you first signed up). Comparing different providers can often uncover substantial savings, especially if you haven’t made any claims.

However, if you’ve used your policy for treatment in recent years, exercise caution. Many providers will not cover ‘pre-existing conditions’, so if you need continued coverage for a condition you already have, it might be wiser to stay with your current insurer.

Haggle with your existing insurer

If you have pre-existing conditions that a new insurer wouldn’t cover, your best option is to negotiate (though anyone can attempt this). Use comparison websites to find the lowest price elsewhere, then contact your current insurer to see if they’ll match it.

Switch policy to cut the price

If your existing insurance provider is unyielding (and you don’t have concerns regarding coverage for any pre-existing conditions), kindly inform them of your intention to switch. After that, simply arrange for the new policy with the more affordable provider to reduce your expenses.

How to complain about your insurance provider

The insurance sector often struggles with its image regarding customer service. What works well for one individual might be a nightmare for another.

Frequent issues include delayed or denied claims, unjust fees, and hidden exclusions buried in fine print.

Initially, it’s advisable to reach out to your provider directly. However, if that doesn’t yield results, you can utilize Resolver, a free complaints tool that assists you in handling your complaint. If the company remains uncooperative, Resolver also guides you on escalating the matter to the free Financial Ombudsman Service.