Health Care Insurance Calculator UK Excess + No-Claims Discount
Struggling to decode private medical insurance quotes in the UK? As an FCA-authorised broker that has arranged over 900,000 policies of various kinds, WeCovr can help. This guide explains how your excess and no-claims discount (NCD) are key levers for managing your premium, helping you find affordable, high-quality cover.
See how excess and NCD interact to lower your premium over time
Understanding private medical insurance (PMI) can feel like learning a new language. Terms like 'excess', 'moratorium', and 'no-claims discount' can be confusing. But getting to grips with two key concepts—your excess and your no-claims discount (NCD)—is the single most powerful thing you can do to control the cost of your health cover.
These two elements don't work in isolation. They have a dynamic, see-saw relationship. A smart strategy involving both can significantly lower your premiums year after year. Think of it as a long-term game: a small sacrifice now (a higher excess) can lead to big rewards later (a protected, high NCD).
This guide will break down exactly how they work, how they interact, and how you can use them to your advantage. We'll demystify the jargon and provide clear, real-world examples to help you make an informed decision for your health and your wallet.
A Critical Note on UK Private Medical Insurance Coverage
Before we dive in, it is vital to understand what standard UK private medical insurance is for. PMI is designed to cover acute conditions that arise after your policy begins. An acute condition is a disease, illness, or injury that is likely to respond quickly to treatment and lead to a full recovery.
PMI policies do not cover:
- Pre-existing conditions: Any medical condition, symptom, or related issue you had before the start of your policy.
- Chronic conditions: Long-term illnesses that cannot be cured and require ongoing management, such as diabetes, asthma, hypertension, or arthritis. The day-to-day management of these conditions remains under the care of the NHS.
What is an Excess in Private Health Insurance?
An excess (sometimes called a deductible) is a fixed amount of money you agree to pay towards the cost of your treatment when you make a claim. The insurer pays the rest, up to your policy limits.
Think of it like the excess on your car insurance. If you have a £250 excess and you make a claim for a £2,000 procedure, you pay the first £250, and your insurer pays the remaining £1,750.
You can typically choose your excess level when you take out or renew your policy. Common options in the UK include:
- £0
- £100
- £250
- £500
- £1,000
- Some insurers may offer even higher options up to £5,000.
The rule is simple: the higher the excess you choose, the lower your monthly or annual premium will be.
Why? Because a higher excess means you are taking on more of the financial risk yourself. It also discourages small, frequent claims, which saves the insurer administrative costs.
How an Excess Can Be Applied
It's crucial to check your policy documents to see how your chosen insurer applies the excess. It is usually one of two ways:
- Per Claim: You pay the excess for each new, separate claim you make.
- Per Policy Year: You pay the excess on the first claim (or claims) you make in a policy year, up to the agreed amount. Once you have paid the full excess amount, you won't have to pay it again for any subsequent claims in that same year. Most UK policies operate on a "per policy year" basis, which is generally more favourable for the policyholder.
How Excess Level Affects Your Premium: An Example
Let's look at a typical 40-year-old individual seeking comprehensive cover. The premium is for illustrative purposes only.
| Excess Level | Estimated Monthly Premium | Your Contribution Per Year |
|---|---|---|
| £0 | £95 | £0 |
| £100 | £88 | £100 |
| £250 | £75 | £250 |
| £500 | £62 | £500 |
| £1,000 | £50 | £1,000 |
As you can see, opting for a £1,000 excess instead of a £0 excess could cut the premium almost in half. This is a significant saving, but it relies on you being able to comfortably pay £1,000 if you need to make a claim.
Understanding Your No-Claims Discount (NCD)
A no-claims discount works just like it does in motor insurance. It's a reward from your insurer for not making a claim on your policy. For every consecutive year you hold your policy without claiming, you earn a discount on your renewal premium.
This is one of the most effective ways to keep your private health cover affordable over the long term. The NCD is applied as a percentage reduction to your base premium.
A Typical NCD Scale
Each insurer has its own NCD scale, but most follow a similar pattern. The discount increases each year you don't claim, up to a maximum level.
Here is an example of a common NCD scale:
| Years Without a Claim | NCD Level | Discount on Premium |
|---|---|---|
| 0 (New Policy) | Level 0 | 0% |
| 1 Year | Level 1 | 10% |
| 2 Years | Level 2 | 20% |
| 3 Years | Level 3 | 30% |
| 4 Years | Level 4 | 40% |
| 5 Years | Level 5 | 50% |
| 6 Years | Level 6 | 60% |
| 7+ Years | Level 7 | 70% (Maximum) |
What Happens to Your NCD When You Claim?
Making a claim doesn't usually reset your NCD to zero. Instead, it "steps back" by a few levels. For example, if you were on the maximum 70% discount (Level 7) and made a claim, you might drop back to 40% (Level 4) at your next renewal.
This means your premium will increase, but you still retain a significant discount. If you then go another year without claiming, you'll start climbing the ladder again.
Some insurers also offer an NCD protection add-on. For a small extra cost, this allows you to make one or two claims within a certain period without your NCD being affected.
The Core Interaction: How Excess and NCD Work Together
This is where strategic thinking comes in. Your choice of excess directly influences your likelihood of claiming, which in turn protects or harms your NCD.
- Low Excess Strategy: A low excess (e.g., £100) means you're more likely to claim for smaller treatments, like a course of physiotherapy costing £400. While you only pay £100, making the claim will cause your NCD to drop, leading to a higher premium next year and for several years to come.
- High Excess Strategy: A high excess (e.g., £1,000) makes your premium cheaper from day one. For that same £400 physiotherapy course, you would choose to pay for it yourself ('self-fund') because the cost is less than your excess. By not claiming, you protect your NCD, allowing it to grow and keeping your future premiums as low as possible. You reserve the insurance for significant, high-cost events like surgery, where paying a £1,000 excess on a £15,000 bill is a very good deal.
Real-Life Scenario: Two Friends, Two Strategies
Let's compare two 35-year-old individuals, Sarah and Tom, over five years. They both start with the same base premium of £600 per year and a 0% NCD.
- Sarah chooses a £100 excess. Her adjusted starting premium is £550.
- Tom chooses a £1,000 excess. His adjusted starting premium is £400.
Scenario 1: Sarah (Low Excess)
| Year | Base Premium | Excess | Claim Made? | NCD at Start of Year | NCD Impact | Final Premium Paid | Notes |
|---|---|---|---|---|---|---|---|
| 1 | £600 | £100 | No | 0% | N/A | £550 | Base premium reduced due to excess. |
| 2 | £630 | £100 | Yes (£500 claim) | 10% | Drops to 0% | £630 - 10% = £567 | Claimed for physio. Pays £100 excess. NCD drops. |
| 3 | £660 | £100 | No | 0% | N/A | £610 | Premium rises due to age and lost NCD. |
| 4 | £690 | £100 | No | 10% | N/A | £690 - 10% = £621 | NCD starts to rebuild. |
| 5 | £725 | £100 | No | 20% | N/A | £725 - 20% = £580 | Continues rebuilding NCD. |
| Total | £2,928 (+ £100 excess paid) |
Scenario 2: Tom (High Excess)
| Year | Base Premium | Excess | Claim Made? | NCD at Start of Year | NCD Impact | Final Premium Paid | Notes |
|---|---|---|---|---|---|---|---|
| 1 | £600 | £1,000 | No | 0% | N/A | £400 | Base premium significantly reduced. |
| 2 | £630 | £1,000 | No | 10% | N/A | £630 - 10% = £567 | Self-funds £500 physio, protects NCD. |
| 3 | £660 | £1,000 | No | 20% | N/A | £660 - 20% = £528 | NCD continues to grow. |
| 4 | £690 | £1,000 | No | 30% | N/A | £690 - 30% = £483 | Premiums are kept low by high NCD. |
| 5 | £725 | £1,000 | No | 40% | N/A | £725 - 40% = £435 | Reaches a strong NCD level. |
| Total | £2,413 (+ £500 self-funded) |
The Result:
- Sarah's total cost over 5 years: £2,928 (premiums) + £100 (excess) = £3,028
- Tom's total cost over 5 years: £2,413 (premiums) + £500 (self-funded physio) = £2,913
In this scenario, Tom's high-excess strategy saved him over £100, and by the end of year 5, his annual premium is £145 cheaper than Sarah's. His savings will continue to compound as his NCD grows towards the maximum level. This demonstrates the powerful long-term benefit of using a higher excess to protect your NCD.
How to Choose the Right Excess Level for You
The "best" excess is a personal choice based on your financial situation and attitude to risk. Ask yourself these questions:
- What's my emergency fund like? Could you comfortably pay £500 or £1,000 tomorrow if you needed urgent medical treatment? If not, a lower excess might be safer, even if it costs more per month.
- How important is a low monthly premium? If you're on a tight budget, a higher excess is the most direct way to make your premium more manageable.
- What is my claims history? If you are generally healthy and rarely visit a doctor, a higher excess is a logical choice. If you have a history of needing minor treatments, a lower excess might be more cost-effective.
- Am I willing to 'self-insure' for minor issues? The high-excess strategy works best for people who are happy to pay for smaller costs out-of-pocket to protect their NCD for the big, expensive events.
An expert PMI broker, like our team at WeCovr, can run these calculations for you across multiple insurers to find the perfect sweet spot for your circumstances.
Beyond Excess and NCD: Other Factors That Influence Your Premium
While excess and NCD are key, several other factors combine to determine your final premium:
- Age: This is the most significant factor. Risk of illness increases with age, so premiums rise accordingly.
- Location: Treatment costs vary across the UK. A policy with access to central London hospitals will be more expensive than one for rural Scotland.
- Level of Cover:
- In-patient only: Covers treatment where you need a hospital bed overnight.
- Out-patient cover: Covers consultations, diagnostics (like MRI scans), and therapies that don't require a hospital bed. This is usually an add-on and significantly affects the price.
- Therapies: Cover for physiotherapy, osteopathy, etc.
- Mental Health: Cover for psychiatric treatment and therapy.
- Hospital List: Insurers offer tiered hospital lists. A comprehensive list including premium private hospitals costs more than a limited network.
- Underwriting:
- Moratorium: The insurer doesn't ask for your full medical history upfront but will exclude treatment for any condition you've had in the 5 years before your policy started.
- Full Medical Underwriting (FMU): You declare your full medical history. The insurer then states clearly what is and isn't covered from the start.
WeCovr's Added Value: More Than Just a Quote
Navigating these options can be overwhelming. This is where using an independent, FCA-authorised broker like WeCovr makes all the difference. We don't just give you a price; we provide expert guidance at no cost to you.
- Whole-Market Comparison: We compare policies from all leading UK providers to find the right fit for your needs and budget.
- Personalised Advice: We help you model different excess and NCD scenarios to create a long-term, cost-effective strategy.
- Exclusive Benefits: When you arrange your PMI policy through us, you get complimentary access to CalorieHero, our exclusive AI-powered calorie and nutrition tracking app to support your health goals.
- Multi-Policy Discounts: Our clients often benefit from discounts on other insurance products, such as life or home insurance, when they take out a health policy with us. Our high customer satisfaction ratings reflect our commitment to finding the best value for our clients.
Health and Wellness: Proactive Steps to Keep Premiums Down
While you can't stop getting older, you can take proactive steps to stay healthy. This not only improves your quality of life but also reduces the likelihood of needing to claim, thereby protecting your NCD. Many modern PMI providers actively encourage this with wellness programmes and rewards.
- Balanced Diet: Following principles like the NHS Eatwell Guide, which promotes a diet rich in fruits, vegetables, and whole grains, can help prevent a range of health issues.
- Regular Activity: The NHS recommends at least 150 minutes of moderate-intensity activity (like brisk walking or cycling) or 75 minutes of vigorous-intensity activity (like running) a week.
- Prioritise Sleep: Aim for 7-9 hours of quality sleep per night. Poor sleep is linked to a host of health problems, including weakened immunity and poor mental health.
- Manage Stress: Chronic stress can impact your physical health. Incorporate mindfulness, yoga, or simple breathing exercises into your daily routine.
By embracing a healthier lifestyle, you become a lower risk to an insurer, and by not claiming, you reap the rewards through your NCD.
What happens to my No-Claims Discount if I switch insurers?
Can I change my excess mid-way through my policy year?
Does making a claim for a cash benefit (e.g., for NHS treatment) affect my NCD?
Is a £0 excess a good idea for my health insurance?
Ready to find the perfect balance between your excess, NCD, and premium? Let our expert team at WeCovr do the hard work for you. Get your free, no-obligation quote today and see how a smart strategy can make your private medical insurance more affordable.
Related guides
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.
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