TL;DR
As an FCA-authorised broker that has helped arrange over 900,000 policies of various kinds, WeCovr demystifies private medical insurance costs in the UK. Understanding how premiums are set is the first step towards finding the right cover at the best price. This guide breaks down every factor for you.
Key takeaways
- Major Cities (especially London): Major urban centres have higher operating costs, more advanced (and expensive) technology, and higher consultant fees. A policy that includes access to prime London hospitals like The Cromwell or The London Clinic will be considerably more expensive.
- Suburban and Rural Areas: Hospitals in less populated areas generally have lower running costs, which translates into lower premiums for residents.
- Basic (or Essentials): This is the most affordable type of private health cover. It mainly covers the most expensive treatments: in-patient and day-patient care. This means you're covered for surgery and procedures requiring a hospital bed but not for initial consultations or diagnostics. Cancer cover is often included at a core level.
- Mid-Range (or Comprehensive): The most popular choice. It includes everything in a basic policy, plus a set limit for out-patient cover. This covers specialist consultations, diagnostic tests (like MRI and CT scans), and sometimes therapies.
- Fully Comprehensive: The premium option. This provides extensive cover, including full out-patient cover, and often includes add-ons like mental health support, dental, and optical benefits as standard or with higher limits.
As an FCA-authorised broker that has helped arrange over 900,000 policies of various kinds, WeCovr demystifies private medical insurance costs in the UK. Understanding how premiums are set is the first step towards finding the right cover at the best price. This guide breaks down every factor for you.
WeCovr explains the key factors that determine your PMI costs
Private Medical Insurance (PMI) offers peace of mind, providing prompt access to high-quality private healthcare when you need it most. But how do insurers arrive at the monthly or annual premium you pay? It’s not arbitrary; it's a carefully calculated risk assessment based on a blend of personal details, policy choices, and wider market forces.
Understanding these elements empowers you to build a policy that fits your needs and your budget. Think of it like adjusting the settings on a new gadget – each tweak affects the final performance and cost. At WeCovr, our expertise lies in helping you navigate these settings, ensuring you don't pay for features you don't need while securing the cover that truly matters.
Let's dive into the core components that shape your health insurance premium.
Your Personal Profile: The Starting Point for Any Quote
Insurers begin with you. Your personal circumstances are the single most significant driver of your initial quote.
1. Your Age
This is, without a doubt, the number one factor. From an insurer's perspective, the statistical likelihood of needing medical treatment increases as we get older. Younger applicants typically benefit from lower premiums because they are statistically less likely to make a claim.
As you age, your premium will be reviewed annually and will likely increase, even if you haven't claimed. This is known as "age-related banding." Most insurers move you into a new age band each year, which comes with a corresponding price adjustment.
Illustrative Example: Age-Based Premium Changes
| Age Bracket | Typical Monthly Premium (Mid-Range Cover) | Why the Change? |
|---|---|---|
| 25-30 | £30 - £45 | Lowest risk profile; statistically very healthy. |
| 40-45 | £55 - £75 | Risk of age-related conditions begins to increase. |
| 55-60 | £90 - £140 | Higher probability of needing joint replacements, cardiac care, or cancer treatment. |
| 65+ | £150 - £250+ | Highest risk profile; reflects the increased use of medical services. |
Note: These are illustrative figures for a non-smoker with a standard policy. Actual quotes will vary.
2. Your Location (Postcode)
Where you live in the UK has a major impact on your premium. This is because the cost of private medical treatment varies significantly by region.
- Major Cities (especially London): Major urban centres have higher operating costs, more advanced (and expensive) technology, and higher consultant fees. A policy that includes access to prime London hospitals like The Cromwell or The London Clinic will be considerably more expensive.
- Suburban and Rural Areas: Hospitals in less populated areas generally have lower running costs, which translates into lower premiums for residents.
Insurers use "postcode rating" to group different areas. A quote for someone in Inverness will be substantially lower than an identical policy for someone in Kensington.
3. Your Lifestyle (Smoking & Vaping)
Your health habits matter. Smokers and, increasingly, vapers, will always pay more for private health cover. The link between smoking and a vast range of health conditions—from cancer and heart disease to respiratory illnesses—is undeniable.
Insurers typically classify you as a smoker if you have used any tobacco or nicotine products (including patches, gum, and vapes) in the last 12 months. Expect to pay anywhere from 25% to 50% more than a non-smoker for the same policy. Honesty is crucial here; failing to declare your smoking status can invalidate your policy when you need to make a claim.
4. Your Body Mass Index (BMI) and General Health
While not as direct a factor as smoking, your overall health, often measured by BMI, can influence underwriting decisions. Some insurers may ask for your height and weight to assess potential risks associated with being significantly overweight or underweight.
Proactively managing your health is the best long-term strategy for managing premiums. At WeCovr, we support our clients' wellness journeys by providing complimentary access to CalorieHero, our AI-powered calorie and nutrition tracking app, helping you stay on top of your health goals.
Your Policy Choices: Tailoring Your Cover and Cost
Once your personal profile sets the baseline, the choices you make about your policy have the biggest impact on the final price. This is where you have the most control.
1. The Level of Cover
PMI policies are not one-size-fits-all. They are typically structured in tiers:
- Basic (or Essentials): This is the most affordable type of private health cover. It mainly covers the most expensive treatments: in-patient and day-patient care. This means you're covered for surgery and procedures requiring a hospital bed but not for initial consultations or diagnostics. Cancer cover is often included at a core level.
- Mid-Range (or Comprehensive): The most popular choice. It includes everything in a basic policy, plus a set limit for out-patient cover. This covers specialist consultations, diagnostic tests (like MRI and CT scans), and sometimes therapies.
- Fully Comprehensive: The premium option. This provides extensive cover, including full out-patient cover, and often includes add-ons like mental health support, dental, and optical benefits as standard or with higher limits.
Comparison of Cover Levels
| Feature | Basic Cover | Mid-Range Cover | Fully Comprehensive Cover |
|---|---|---|---|
| In-patient/Day-patient Care | ✅ Fully Covered | ✅ Fully Covered | ✅ Fully Covered |
| Cancer Cover | ✅ Core Cover (e.g., surgery, chemo) | ✅ Enhanced Cover (often with more drug choices) | ✅ Extensive Cover (inc. new drugs, support) |
| Out-patient Consultations & Scans | ❌ Not included | ✅ Included (up to a limit, e.g., £1,000) | ✅ Fully Covered (or very high limit) |
| Therapies (Physio, Osteo etc.) | ❌ Not included | ✅ Often included as an option or standard | ✅ Included with higher limits |
| Mental Health Cover | ❌ Rarely included | ✅ Can be added as an option | ✅ Often included as standard |
| Dental & Optical | ❌ Not included | ❌ Usually an optional add-on | ✅ Can be added or may be included |
2. Your Policy Excess
An excess is the amount you agree to pay towards a claim before the insurer pays the rest. It's a standard feature of most insurance products, from car to home insurance, and PMI is no different.
The rule is simple: a higher excess means a lower premium.
You typically pay the excess once per policy year, per person, regardless of how many claims you make.
- Example: You have a policy with a £250 excess. You need physiotherapy costing £600. You pay the first £250, and your insurer pays the remaining £350. If you need another, unrelated treatment later in the same year, you won't have to pay the excess again.
Choosing an excess of £250, £500, or even £1,000 can significantly reduce your monthly payments, making it a powerful tool for managing costs.
3. Your Hospital List
Insurers negotiate rates with hospital groups across the country. They then offer you a choice of "hospital lists" that dictate where you can receive treatment.
- Local/Trust Hospitals: A restricted list of local private hospitals or private wings of NHS hospitals. This is the most budget-friendly option.
- Nationwide: A broad list of private hospitals across the UK, offering more choice and flexibility.
- Premium/London Upgrade: This list includes the top-tier, high-cost hospitals in Central London. Selecting this option will noticeably increase your premium and is generally only necessary if you live or work in London and want access to these specific facilities.
Choosing a more limited hospital list is an effective way to lower your premium without sacrificing the quality of care, as long as the list contains good quality, accessible hospitals near you. A skilled PMI broker like WeCovr can help you review the lists to ensure they meet your needs.
4. Optional Extras
This is where you can truly customise your plan. Most of the best PMI providers in the UK offer a menu of optional benefits you can add to a core policy for an additional cost. Common add-ons include:
- Dental and Optical Cover: For routine check-ups, treatments, and eyewear.
- Enhanced Mental Health Cover: While some cover may be included, this add-on provides more extensive support for therapy and psychiatric care.
- Therapies Cover: Adds or increases limits for physiotherapy, osteopathy, chiropractic, and other complementary treatments.
- Travel Cover: Some insurers offer a bolt-on that covers you for medical emergencies abroad.
Only add what you genuinely believe you will use. It's easy to over-insure yourself with benefits that sound good but you are unlikely to claim on.
5. The "Six-Week Option"
This is a clever cost-saving feature offered by some insurers. If you add the six-week option to your policy, you agree to use the NHS for in-patient treatment if the NHS waiting list for that procedure is less than six weeks. If the waiting list is longer, your private cover kicks in immediately.
Because this reduces the likelihood of the insurer having to pay for your treatment, it can lower your premium by around 15-25%. It's a popular compromise, offering a safety net against long NHS waits while keeping costs down.
A Critical Note: Pre-Existing and Chronic Conditions
This is one of the most important and often misunderstood aspects of private medical insurance in the UK.
Standard UK PMI is designed to cover new, acute medical conditions that arise after your policy begins. It is not designed to cover pre-existing or chronic conditions.
Let's define these terms:
- Acute Condition: A disease, illness, or injury that is likely to respond quickly to treatment and lead to a full recovery. Examples include joint replacements, cataract surgery, hernias, and most infections. This is what PMI covers.
- Pre-existing Condition: Any illness, disease, or injury for which you have had symptoms, medication, advice, or treatment before taking out the policy.
- Chronic Condition: An illness that is long-lasting and cannot be cured, only managed. Examples include diabetes, asthma, high blood pressure, and Crohn's disease.
Private insurers do not cover chronic conditions because they require ongoing, long-term management rather than a short-term curative treatment, which falls outside the intended scope of PMI. Management of chronic conditions remains with the NHS.
How Underwriting Affects Pre-Existing Conditions
When you apply, the insurer will use one of two main methods to deal with your medical history. This is called underwriting.
- Moratorium Underwriting (Most Common): This is the "wait and see" approach. You don't have to declare your full medical history upfront. Instead, the insurer automatically excludes any condition you've had symptoms, treatment, or advice for in the five years before your policy start date. However, if you then go two full years on the policy without any symptoms, treatment, or advice for that specific condition, it may become eligible for cover. It's simpler and quicker to set up but can lead to uncertainty at the point of a claim.
- Full Medical Underwriting (FMU): You complete a detailed health questionnaire, declaring your entire medical history. The insurer assesses it and tells you upfront exactly what is and isn't covered. Any pre-existing conditions will be explicitly excluded in your policy documents. This takes longer to set up but provides complete clarity from day one.
An expert PMI broker can explain the pros and cons of each method and help you decide which is right for your circumstances.
Market-Wide Factors That Influence Your Premium
Finally, your premium is also affected by factors beyond your control that impact the entire insurance market.
Medical Inflation
The cost of healthcare consistently rises faster than general inflation (the Consumer Price Index). This is due to:
- New, expensive drugs and treatments: Breakthroughs in medicine, particularly in oncology, are wonderful but costly.
- Advanced diagnostic technology: New scanners and surgical equipment are incredibly expensive to buy and maintain.
- Increased demand: An ageing population naturally requires more medical care.
Recent data from UK health analysts suggests that medical inflation often runs between 8% and 12% annually, compared to general inflation which may be much lower. This underlying cost increase is a primary reason why all health insurance premiums tend to rise each year at renewal.
Insurance Premium Tax (IPT)
IPT is a tax on general insurance premiums, including PMI. The current standard rate in the UK is 12%. This is automatically included in the price you are quoted, so a £100 base premium becomes £112 after tax. Any future changes to the IPT rate by the government will directly affect your renewal price.
No Claims Discount (NCD)
Similar to car insurance, most PMI providers operate a No Claims Discount system to reward customers who don't make a claim. It works on a ladder system.
- Each year you don't claim, you move up a level on the NCD scale, earning a larger discount (often up to 65-75%).
- If you make a claim, you typically move down two or three levels at your next renewal, reducing your discount and increasing your premium.
This system encourages you to consider whether to claim for minor expenses, perhaps paying for a single physiotherapy session out-of-pocket to protect a significant long-term discount.
How WeCovr Helps You Find the Best Value
Navigating these variables can feel complex, but you don't have to do it alone. As an independent and FCA-authorised broker, WeCovr provides impartial, expert advice to help you find the right private health cover.
- We Compare the Market: We have access to policies from all the leading UK insurers, saving you the time and hassle of getting quotes individually.
- We Tailor Your Policy: We listen to your needs and budget, helping you adjust the variables—excess, hospital list, optional extras—to build the perfect plan.
- We Offer It At No Cost to You: Our service is free. We are paid a commission by the insurer you choose, so you get expert advice without paying a penny extra.
- We Add Value: When you take out a PMI or Life Insurance policy with us, we offer discounts on other insurance products you might need. Plus, all our clients get complimentary access to the CalorieHero wellness app. Our high customer satisfaction ratings reflect our commitment to finding the best outcomes for our clients.
Your health is your most valuable asset. Understanding how your health insurance premium is calculated is the first step to protecting it wisely.
Why does my health insurance premium increase every year?
Can I get private health insurance if I have a pre-existing condition?
What are the easiest ways to lower my private medical insurance cost?
- Increase your excess: Choosing to pay a higher amount towards your first claim of the year (e.g., £500 instead of £100) will significantly lower your monthly payments.
- Choose a different hospital list: Opting for a list that excludes the most expensive central London hospitals can reduce your premium without compromising on quality care elsewhere.
- Add a six-week option: Agreeing to use the NHS if the waiting list for treatment is under six weeks can provide a substantial discount, acting as a safety net for longer waits.
**Ready to find the right health cover at the right price?**
Get a free, no-obligation quote from WeCovr today. Our expert advisors will compare the UK's leading insurers and help you build a policy that fits your life and your budget.
