Expert Tips for Reducing Your PMI Excess Wisely
Navigating the world of private medical insurance (PMI) in the UK can feel complex, but understanding one key component—the excess—can unlock significant savings. At WeCovr, an FCA-authorised broker that has helped arrange over 800,000 policies, we believe that informed choices lead to better health outcomes and financial peace of mind.
When to pay more, when not to, and strategies for lowering costs in the long run
Your policy's excess is the single most powerful lever you can pull to adjust your monthly premium. It's a classic trade-off: agree to pay more towards your initial treatment costs, and your insurer will reward you with a lower premium. But is a higher excess always the right choice?
This expert guide will walk you through everything you need to know. We’ll explore what an excess is, help you decide when a high or low excess is appropriate for your circumstances, and reveal advanced strategies for reducing your overall private health cover costs without compromising on quality care.
What is a PMI Excess and How Does It Work?
Before diving into strategies, it's crucial to understand exactly what an excess is. Think of it like the excess on your car or home insurance.
An excess is a pre-agreed amount of money that you must pay towards a claim before your insurance provider starts to pay.
Once you've paid this amount, your insurer will cover the remaining eligible costs of your treatment, up to your policy's limits.
Crucial Note on UK PMI: It's vital to remember that standard private medical insurance in the UK is designed to cover acute conditions—illnesses or injuries that are new, unexpected, and likely to respond quickly to treatment. It does not cover chronic conditions (long-term illnesses like diabetes or asthma) or pre-existing conditions you had before taking out the policy.
Defining the Two Main Types of Excess
Insurers in the UK typically offer two kinds of excess. Understanding the difference is critical, as it directly impacts how much you might pay out of pocket.
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Excess Per Claim (or Per Condition): With this model, you pay the excess for each new, unrelated medical condition you claim for. If you have a knee problem and make a claim, you'll pay your excess. If, three months later, you develop a separate shoulder issue and make another claim, you'll pay the excess again. This can be costly if you're unlucky enough to have multiple health issues in one year.
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Excess Per Policy Year: This is often the more popular and predictable option. You pay the excess only once per policy year, regardless of how many separate claims you make for different conditions. Once you've paid your agreed excess amount for that year, all subsequent eligible claims are covered in full by the insurer.
A Real-Life Example: How an Excess Works in Practice
Let's imagine two people, Tom and Priya, both have a private health cover policy with a £500 excess.
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Tom's Policy: Has a £500 excess per claim.
- In March, he has knee surgery costing £4,000. He pays the first £500, and his insurer pays £3,500.
- In September, he needs diagnostic tests for a stomach issue, costing £800. He must pay another £500, and his insurer pays £300.
- Total paid by Tom in a year: £1,000.
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Priya's Policy: Has a £500 excess per policy year.
- In March, she has the same knee surgery costing £4,000. She pays the first £500, and her insurer pays £3,500. Her annual excess is now fully paid.
- In September, she needs the same diagnostic tests costing £800. Because she has already met her annual excess, she pays £0. Her insurer pays the full £800.
- Total paid by Priya in a year: £500.
As you can see, the 'per policy year' option provides greater financial certainty. An expert PMI broker can help you find policies with this preferable structure.
The Core Dilemma: Higher Excess vs. Lower Premium
The relationship between your excess and your premium is simple and direct:
- Higher Excess = Lower Premium
- Lower Excess = Higher Premium
Why? Because a higher excess means you are sharing more of the financial risk with the insurer. By agreeing to cover a larger portion of the initial costs yourself, you reduce the insurer's potential payout, and they pass this saving on to you in the form of cheaper monthly or annual payments.
The table below gives an illustrative example of how changing your excess can impact your premium.
| Excess Amount | Estimated Monthly Premium* | Total Annual Premium | Potential Annual Saving (vs. £0 Excess) |
|---|---|---|---|
| £0 | £90 | £1,080 | £0 |
| £250 | £75 | £900 | £180 |
| £500 | £65 | £780 | £300 |
| £1,000 | £50 | £600 | £480 |
*Premiums are illustrative estimates for a 40-year-old non-smoker in a mid-UK postcode with a comprehensive policy. Your actual quote will depend on your age, location, health, and chosen cover level. Source: Internal WeCovr market analysis.
The decision, therefore, is a personal one based on your financial situation and attitude to risk.
When to Choose a HIGHER Excess (£500+): Is It Right for You?
Opting for a higher excess is a powerful cost-saving strategy, but it's only wise if it aligns with your financial circumstances and how you intend to use your policy.
1. You Have Sufficient Savings
This is the most important factor. If you choose a £1,000 excess, you must be confident you could pay that amount tomorrow without causing yourself financial hardship. A good rule of thumb is to have at least twice your excess amount in an easily accessible emergency fund. If you can comfortably absorb this potential cost, you can enjoy significantly lower premiums all year round.
2. You're Primarily Seeking "Peace of Mind" Cover
If you are young, in good health, and your main reason for getting PMI is to protect against major, unexpected health events (like needing cancer treatment or major surgery), a higher excess makes perfect sense. You aren't planning to claim for minor consultations or therapies. You're essentially self-insuring for the small stuff and using your policy as a safety net for the big, expensive issues.
3. Your Policy Includes a Valuable NHS Cash Benefit
Some private medical insurance policies include a feature that pays you a fixed cash amount (e.g., £100-£250 per night) for every night you choose to receive treatment in an NHS hospital. If you have a high excess, you could potentially use the NHS for a procedure, receive this cash payment, and use it to offset the cost of your excess for a future private claim.
4. You Want to Maximise Long-Term Savings
By choosing a £1,000 excess over a £0 excess, you could save £400-£500 a year or more on premiums. If you go three years without making a claim, you've saved £1,200-£1,500. This saving could more than cover the cost of your excess if and when you do need to make a claim. It's a calculated financial decision.
When to Choose a LOWER (or £0) Excess: The Case for Caution
While a high excess is great for saving on premiums, it's not the right choice for everyone. Here are situations where a lower excess (£0, £100, or £250) is the more prudent option.
1. You Have Limited or No Emergency Savings
If a sudden bill for £500 or £1,000 would be a major financial shock, you should not choose a high excess. The whole point of insurance is to reduce financial stress during a difficult time, not add to it. In this case, it is far wiser to pay a higher, predictable monthly premium and know that your out-of-pocket costs will be minimal if you need to claim.
2. You Plan to Use Your Policy for Regular, Smaller-Cost Treatments
Private medical insurance isn't just for surgery. Many people value it for quick access to:
- Specialist consultations (£200-£300)
- Diagnostic scans like MRI or CT (£500-£1,500)
- Physiotherapy sessions (£50-£80 per session)
If your excess is £500, you would have to pay for most consultations and a full course of physiotherapy entirely out of your own pocket. A lower excess of £100 or £250 makes the policy far more usable for these valuable day-to-day benefits.
3. You are Insuring a Family with Children
When you have children on your policy, the likelihood of needing to see a specialist for minor illnesses, ear infections, or sports injuries increases. Facing multiple £500 excesses for different family members in a single year could become very expensive. A lower excess, or a policy that caps the total excess payable for a family, provides much-needed financial protection.
4. You Prioritise Predictable Budgeting
For many, the peace of mind from having a fixed, predictable monthly outgoing is paramount. By choosing a low or zero excess, your main cost is your premium. You eliminate the risk of a large, unexpected bill, making it easier to manage your household finances.
Advanced Strategies for Optimising Your PMI Costs
Adjusting your excess is just one piece of the puzzle. An expert PMI broker like WeCovr can help you combine several strategies to build an affordable policy that still delivers fantastic cover.
1. Add a "6-Week Wait" Option
This is one of the most effective ways to slash your premiums. With this option, if the treatment you need is available on the NHS within six weeks of your specialist's recommendation, you agree to use the NHS. If the NHS waiting list is longer than six weeks, your private medical insurance kicks in immediately.
Given the current pressures on the NHS, this is often a very safe bet. As of July 2024, the NHS Referral to Treatment (RTT) waiting list in England stood at 7.57 million pathways. By agreeing to use the NHS for quicker procedures, you can reduce your premium by 20-40% while still having the private option for longer waits.
2. Tailor Your Hospital List
Insurers group UK private hospitals into tiers. A policy that gives you access to every hospital in the country, including the high-end central London ones, will be the most expensive. You can achieve significant savings by choosing a more limited list:
- Local or Regional List: Restricts you to a network of hospitals in your geographical area.
- National List: Gives you access to a wide range of hospitals across the UK but excludes the most expensive ones in central London.
Unless you have a specific need to be treated in London, choosing a national or local list is a smart way to cut costs.
3. Choose the Right Underwriting
Underwriting is how an insurer assesses your medical history to decide what they will and won't cover.
| Underwriting Type | How It Works | Best For |
|---|---|---|
| Moratorium (Mori) | The most common type. No medical questionnaire is needed. Any condition you've had symptoms, treatment, or advice for in the 5 years before your policy starts is automatically excluded. This exclusion is reviewed after you've held the policy for 2 continuous years. If you remain trouble-free for that condition during those 2 years, it may become eligible for cover. | People who want a quick and simple application process and haven't had recent health issues. |
| Full Medical Underwriting (FMU) | You complete a detailed health questionnaire. The insurer assesses your history and lists specific conditions that will be permanently excluded from cover from day one. Everything else is covered. | People with a completely clean medical history (can sometimes result in a lower premium) or those who want absolute certainty about what is and isn't covered from the start. |
The team at WeCovr can talk you through your health history and advise which underwriting method is likely to give you the best outcome for your private medical insurance UK policy.
4. Pay Annually
If you can afford to, paying your full annual premium in one go can often secure you a discount of around 3-5%. Insurers favour this as it reduces their administrative overheads.
Beyond Policy Tweaks: Lowering Your Long-Term Health Risks
The cheapest claim is the one you never have to make. The best PMI providers understand this and actively encourage you to live a healthier life, which in turn reduces your long-term insurance costs.
Embrace Insurer Wellness Programmes
Leading UK insurers like Aviva and Vitality have pioneered wellness programmes that reward you for healthy behaviour. By linking your policy to a smartphone or fitness tracker, you can earn points for:
- Hitting daily step counts
- Completing gym workouts
- Buying healthy food
- Completing online health assessments
- Getting regular health checks
These points can be exchanged for real-world rewards like free cinema tickets, discounted gym memberships, and even reductions on your renewal premium.
To support this, all WeCovr clients who purchase PMI or Life Insurance gain complimentary access to CalorieHero, our AI-powered calorie and nutrition tracking app, helping you stay on top of your diet and health goals.
Simple Lifestyle Changes with a Big Impact
Small, consistent changes to your daily habits can have a profound effect on your health, reducing your risk of needing medical treatment and helping to keep your insurance premiums stable over time.
- Diet: A balanced diet, low in processed foods and high in fruits, vegetables, and fibre, is your first line of defence against many illnesses.
- Activity: The NHS recommends at least 150 minutes of moderate-intensity activity (like a brisk walk or cycling) or 75 minutes of vigorous activity (like running or swimming) per week.
- Sleep: Prioritising 7-9 hours of quality sleep per night is essential for your immune system, mental health, and cognitive function.
- Smoking & Alcohol: Quitting smoking is the single most impactful health decision you can make, and it will drastically lower your PMI premiums. Reducing alcohol consumption to within recommended guidelines also lowers numerous health risks.
By demonstrating a healthy lifestyle, you become a lower risk to an insurer, which can be reflected in more favourable premiums, especially at renewal time.
Does my private medical insurance excess apply to every single benefit?
Can I change my PMI excess amount whenever I want?
What happens if my medical treatment costs less than my excess?
Does UK private health insurance cover pre-existing or chronic conditions?
Take Control of Your Health and Your Finances Today
Choosing the right excess is a balancing act between your monthly budget and your financial safety net. There is no single "best" answer—only what's right for you. By understanding the trade-offs and using the strategies outlined in this guide, you can confidently build a policy that offers both protection and value.
Ready to find the perfect balance for your private medical insurance? The expert, friendly team at WeCovr is here to help. We compare policies from across the market to find a plan tailored to your needs and budget, all at no cost to you. Plus, when you buy a policy, you'll receive discounts on other cover and complimentary access to our CalorieHero wellness app.
Why private medical insurance and how does it work?
What is Private Medical Insurance?
Private medical insurance (PMI) is a type of health insurance that provides access to private healthcare services in the UK. It covers the cost of private medical treatment, allowing you to bypass NHS waiting lists and receive faster, more convenient care.How does it work?
Private medical insurance works by paying for your private healthcare costs. When you need treatment, you can choose to go private and your insurance will cover the costs, subject to your policy terms and conditions. This can include:• Private consultations with specialists
• Private hospital treatment and surgery
• Diagnostic tests and scans
• Physiotherapy and rehabilitation
• Mental health treatment
Your premium depends on factors like your age, health, occupation, and the level of cover you choose. Most policies offer different levels of cover, from basic to comprehensive, allowing you to tailor the policy to your needs and budget.
Questions to ask yourself regarding private medical insurance
Just ask yourself:👉 Are you concerned about NHS waiting times for treatment?
👉 Would you prefer to choose your own consultant and hospital?
👉 Do you want faster access to diagnostic tests and scans?
👉 Would you like private hospital accommodation and better food?
👉 Do you want to avoid the stress of NHS waiting lists?
Many people don't realise that private medical insurance is more affordable than they think, especially when you consider the value of faster treatment and better facilities. A great insurance policy can provide peace of mind and ensure you receive the care you need when you need it.
Benefits offered by private medical insurance
Private medical insurance provides numerous benefits that can significantly improve your healthcare experience and outcomes:Faster Access to Treatment
One of the biggest advantages is avoiding NHS waiting lists. While the NHS provides excellent care, waiting times can be lengthy. With private medical insurance, you can often receive treatment within days or weeks rather than months.
Choice of Consultant and Hospital
You can choose your preferred consultant and hospital, giving you more control over your healthcare journey. This is particularly important for complex treatments where you want a specific specialist.
Better Facilities and Accommodation
Private hospitals typically offer superior facilities, including private rooms, better food, and more comfortable surroundings. This can make your recovery more pleasant and potentially faster.
Advanced Treatments
Private medical insurance often covers treatments and medications not available on the NHS, giving you access to the latest medical advances and technologies.
Mental Health Support
Many policies include comprehensive mental health coverage, providing faster access to therapy and psychiatric care when needed.
Tax Benefits for Business Owners
If you're self-employed or a business owner, private medical insurance premiums can be tax-deductible, making it a cost-effective way to protect your health and your business.
Peace of Mind
Knowing you have access to private healthcare when you need it provides invaluable peace of mind, especially for those with ongoing health conditions or concerns about NHS capacity.
Private medical insurance is particularly valuable for those who want to take control of their healthcare journey and ensure they receive the best possible treatment when they need it most.
Important Fact!
We can look at a more suitable option mid-term!
Why is it important to get private medical insurance early?
👉 Many people are very thankful that they had their private medical insurance cover in place before running into some serious health issues. Private medical insurance is as important as life insurance for protecting your family's finances.👉 We insure our cars, houses, and even our phones! Yet our health is the most precious thing we have.
Easily one of the most important insurance purchases an individual or family can make in their lifetime, the decision to buy private medical insurance can be made much simpler with the help of FCA-authorised advisers. They are the specialists who do the searching and analysis helping people choose between various types of private medical insurance policies available in the market, including different levels of cover and policy types most suitable to the client's individual circumstances.
It certainly won't do any harm if you speak with one of our experienced insurance experts who are passionate about advising people on financial matters related to private medical insurance and are keen to provide you with a free consultation.
You can discuss with them in detail what affordable private medical insurance plan for the necessary peace of mind they would recommend! WeCovr works with some of the best advisers in the market.
By tapping the button below, you can book a free call with them in less than 30 seconds right now:
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