PMI and Excess How to Choose the Right Level
As an FCA-authorised broker that has helped UK customers secure over 900,000 policies, WeCovr understands that navigating the world of private medical insurance can be complex. One of the most common questions we hear is about the 'excess' – a key factor that directly impacts your monthly premium.
WeCovr explains how excess affects your PMI premiums
Choosing the right private medical insurance (PMI) is a significant decision for your health and financial wellbeing. It’s about more than just picking a provider; it involves tailoring a policy to fit your specific needs and budget. One of the most powerful tools you have to control the cost of your premium is the excess.
But what exactly is an excess? How does it work? And most importantly, how do you choose the right level for you?
This comprehensive guide will demystify the PMI excess, explaining everything you need to know in plain English. We’ll explore how it directly influences your premiums, the different types of excess available, and provide practical steps to help you make an informed choice.
What is a Private Health Insurance Excess?
In the simplest terms, an excess (also known as a deductible) is a fixed amount of money you agree to pay towards the cost of your private medical treatment before your insurance provider starts paying.
Think of it as your contribution to the claim. By agreeing to pay a small portion of the initial cost, you are sharing a tiny piece of the financial risk with the insurer. In return, they reward you with a lower monthly or annual premium. It’s a fundamental principle of insurance designed to make policies more affordable and to discourage very small, frequent claims.
Key takeaway: The excess is the amount you pay out-of-pocket when you make a claim. The insurer pays the rest, up to your policy limits.
How Does a PMI Excess Work in Practice? A Real-Life Example
Let's imagine you have a private health cover policy with a £250 excess.
You develop persistent knee pain and your GP refers you to a specialist. You decide to use your PMI to see a private consultant and have an MRI scan.
- Initial Consultation: The private consultant's fee is £200.
- Diagnostic Scan: The MRI scan costs £750.
- Total Initial Cost: The total bill for this initial part of your treatment is £950 (£200 + £750).
Because you have a £250 excess, this is how the payment would be handled:
- You Pay: The first £250 of the £950 bill.
- Your Insurer Pays: The remaining £700 (£950 - £250).
If you later need surgery for the same knee condition within the same policy year (depending on your excess type), you would not have to pay the excess again for that specific claim. Your insurer would cover the full cost of the eligible treatment.
The Golden Rule of PMI: Higher Excess = Lower Premiums
The relationship between your excess and your premium is simple and direct:
The higher the excess you choose, the lower your monthly or annual premium will be.
Why is this? Insurers see a higher excess as a sign that you are less likely to make small claims. It demonstrates that you are willing to handle minor costs yourself, reserving your insurance for more significant medical events. This reduces the insurer's potential payout and administrative costs, and they pass these savings directly on to you in the form of cheaper premiums.
The savings can be substantial. Opting for a £500 or £1,000 excess instead of a £0 or £100 excess can reduce your premium by as much as 20-35%, depending on the provider and your personal circumstances.
Illustrative Impact of Excess on Monthly Premiums
To show how this works, here's an example table for a healthy 40-year-old individual living in a mid-cost UK region. These figures are for illustrative purposes only and will vary.
| Excess Level | Example Monthly Premium* | Annual Saving (vs. £0 Excess) |
|---|---|---|
| £0 | £85 | £0 |
| £100 | £79 | £72 |
| £250 | £72 | £156 |
| £500 | £65 | £240 |
| £1,000 | £55 | £360 |
*Premiums are indicative. Your actual quote will depend on your age, health, location, and chosen cover level.
As you can see, choosing a £500 excess could save you £240 a year compared to a policy with no excess. That's a significant saving that makes quality private health cover more accessible.
Types of Excess on UK PMI Policies
When you select an excess, you’ll typically have two main options. It's crucial to understand the difference as it affects how and when you'll pay.
-
Excess Per Claim / Per Condition
- This is the most common type. You pay the excess for each separate medical condition you claim for during your policy year.
- Example: In a single year, you claim for a knee problem (£250 excess paid) and later for a separate shoulder issue (£250 excess paid again). You would pay a total of £500 in excesses that year. However, all follow-up treatments for the knee (consultations, scans, surgery) would be covered under the single initial £250 excess payment for that claim.
-
Excess Per Policy Year
- With this type, you pay the excess only once per policy year, regardless of how many different conditions you claim for.
- Example: You have a £500 annual excess. Your first claim of the year is for a £300 consultation. You pay the £300. Your next claim is for a £1,500 procedure for a different condition. You only need to pay the remaining £200 of your excess (£500 - £300). For any further claims in that same policy year, you would pay nothing towards the excess.
- This option is often slightly more expensive than a 'per claim' excess but offers more predictability.
An expert PMI broker like WeCovr can help you compare policies from different providers to see which type of excess they offer and which one best suits your potential needs.
A Critical Note on What PMI Covers in the UK
It is absolutely essential to understand what standard private medical insurance in the UK is designed for. This knowledge prevents misunderstandings and ensures you have the right expectations.
PMI is for Acute Conditions Arising After Your Policy Starts
- An acute condition is a disease, illness, or injury that is likely to respond quickly to treatment and from which you are expected to make a full recovery. Think of conditions like cataracts, hernias, joint problems requiring replacement, or gallbladder issues. PMI's primary role is to provide fast access to diagnosis and treatment for these types of conditions.
PMI Does Not Cover Chronic or Pre-existing Conditions
- Standard UK PMI policies do not cover pre-existing conditions. These are any illnesses, diseases, or injuries for which you have experienced symptoms, sought advice, or received treatment before your policy began.
- Similarly, PMI does not cover the routine management of chronic conditions. These are long-term illnesses that cannot be conventionally 'cured' but can be managed, such as diabetes, asthma, high blood pressure, or Crohn's disease.
- The management of pre-existing and chronic conditions rightly remains the responsibility of our wonderful and comprehensive NHS.
Understanding this distinction is key to valuing your PMI for what it is: a complementary service to the NHS, designed to get you back on your feet quickly from new, acute medical problems.
How to Choose the Right Excess Level for You: A Step-by-Step Guide
Selecting your excess level is a balancing act between affordable premiums and what you could comfortably pay if you needed to make a claim. Here’s a practical guide to help you decide.
Step 1: Assess Your Financial Situation
Be realistic about your finances. Ask yourself:
- "If I needed medical treatment tomorrow, how much could I afford to pay out-of-pocket without causing financial stress?"
- Look at your emergency savings. A good rule of thumb is that your excess should not be more than what you could comfortably access from your savings.
- Don't choose a £1,000 excess just to get the lowest premium if paying that £1,000 would be a major hardship.
Step 2: Consider Your Attitude to Risk
Think about your personality and what gives you peace of mind.
- Are you risk-averse? If the thought of a surprise medical bill is worrying, you might prefer a lower excess (e.g., £100 or £250). You'll pay a higher premium, but you'll have greater certainty about your maximum out-of-pocket cost.
- Are you a calculated risk-taker? If you are young, healthy, have a good level of savings, and primarily want PMI for major issues (like surgery), you might be comfortable with a higher excess (£500 or £1,000). You accept the risk of paying more upfront in exchange for significant long-term premium savings.
Step 3: Review Your Medical History (and Your Family's)
While PMI doesn't cover pre-existing conditions, your general health can guide your choice.
- If you are generally fit and well and rarely visit a doctor, a higher excess might feel like a sensible economic choice.
- If you have a family history of certain acute conditions (that aren't pre-existing for you), or if you play sports that carry a risk of injury (like football or rugby), you might anticipate a slightly higher chance of needing to claim. In this case, a mid-range excess (£250 or £500) could be a prudent middle ground.
Step 4: Do the Maths
Calculate the annual cost difference between different excess levels.
- As shown in our table, moving from a £250 excess to a £500 excess might save you £84 per year. If you don't make a claim, that's a straightforward saving.
- However, if you do make a claim, you'll need to pay an extra £250. You would need to go three years without a claim to break even on that decision (£84 x 3 ≈ £252).
- This calculation helps you weigh the short-term saving against the potential long-term cost.
Common Excess Levels Offered by UK Insurers
Most major UK PMI providers offer a flexible range of excess options. Here are the most common tiers:
- £0: The highest premium option. You pay nothing when you claim. This is best for those who want complete cost certainty and are willing to pay for it.
- £100 - £250: The most popular choices. This range offers a good balance between a noticeable premium reduction and a manageable out-of-pocket cost for most people.
- £500: A great option for significant premium savings, suitable for those with adequate emergency funds who want to reserve their PMI for more serious health concerns.
- £1,000+: This provides the largest discount on premiums. It essentially turns your PMI into a safety net for major medical events like cancer treatment or significant surgery. It's often chosen by those who can comfortably self-fund minor diagnostics or consultations.
Beyond Excess: Other Factors That Influence Your PMI Premium
Your excess is just one piece of the puzzle. It's helpful to know what other factors determine the final cost of your private medical insurance UK policy.
| Factor | How It Influences Your Premium |
|---|---|
| Age | This is the single biggest factor. The older you get, the higher the statistical likelihood of needing medical treatment, so premiums increase with age. |
| Location | The cost of private healthcare varies across the UK. Hospitals in Central London, for example, are more expensive than those in other regions. Your postcode will affect your premium. |
| Level of Cover | A comprehensive policy with extensive outpatient cover, mental health support, and dental/optical benefits will cost more than a basic plan that only covers inpatient treatment (care requiring a hospital bed). |
| Hospital List | Insurers have different tiers of hospital lists. A policy that gives you access to all private hospitals, including the most expensive London clinics, will have a higher premium than one with a more restricted list. |
| Underwriting | You can choose 'Full Medical Underwriting' (you declare your medical history upfront) or 'Moratorium' (pre-existing conditions are automatically excluded for a set period, usually 24 months). The choice can affect the price. |
| No Claims Discount | Similar to car insurance, many PMI providers offer a discount on your renewal premium for every year you don't make a claim. |
Working with an independent PMI broker like WeCovr is invaluable here. We can help you adjust all these levers—not just the excess—to build a policy that provides the protection you need at a price you can afford.
Wellness and Health: Reducing Your Need to Claim
While having robust private health cover provides peace of mind, the best-case scenario is not needing to use it at all. Investing in your health can reduce your long-term risk of developing many acute conditions.
Here are some evidence-based tips for a healthier life:
- Balanced Diet: A diet rich in fruits, vegetables, whole grains, and lean proteins can significantly reduce the risk of heart disease, certain cancers, and other conditions. According to NHS data, eating a healthy, balanced diet is a cornerstone of maintaining good health.
- Regular Physical 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 or tennis) a week. This helps maintain a healthy weight, strengthens bones and muscles, and improves cardiovascular health.
- Prioritise Sleep: Aim for 7-9 hours of quality sleep per night. Poor sleep is linked to a host of health problems, including a weakened immune system and an increased risk of chronic (and some acute) health issues.
- Manage Stress: Chronic stress can negatively impact your physical health. Practices like mindfulness, yoga, or even simple hobbies can help manage stress levels effectively.
- Stay Hydrated: Drinking enough water is vital for almost every bodily function, from regulating temperature to protecting your joints.
As a WeCovr customer, you also get complimentary access to CalorieHero, our AI-powered calorie and nutrition tracking app, making it easier than ever to manage your diet and stay on top of your health goals.
How WeCovr Makes Choosing Your PMI Simple and Effective
The UK private medical insurance market is crowded with excellent providers, including Bupa, AXA Health, Aviva, and Vitality. Each offers different benefits, hospital lists, and excess options. Trying to compare them all on your own can be overwhelming.
This is where WeCovr comes in.
- We are experts: We live and breathe the UK PMI market. Our advisors have deep knowledge of each provider's strengths and weaknesses.
- We are impartial: As an independent broker, our loyalty is to you, not to any single insurance company. We find the best policy for your needs from a wide panel of top insurers.
- Our service is free: You don't pay us a penny for our advice or for arranging your policy. We receive a commission from the insurer you choose, which doesn't affect the price you pay.
- We save you time and money: We do the comparison shopping for you, ensuring you find the optimal balance of cover, service, and price. We can often find deals and policy combinations that aren't available to the public.
- Added Value: When you arrange your PMI or Life Insurance with us, we offer discounts on other types of cover, like home or travel insurance, and provide free access to health tools like the CalorieHero app. Our high customer satisfaction ratings reflect our commitment to providing exceptional service.
Choosing an excess is a crucial decision, but it's just one part of creating the perfect private health cover plan. Let us help you get it right.
Can I change my PMI excess level?
Do I have to pay the excess if I only have a consultation and no further treatment?
What happens if I can't afford to pay my excess when I need treatment?
Does the NHS pay for my excess?
Ready to find out how much you could save? Get a fast, free, no-obligation quote from WeCovr today. Our expert advisors will help you compare the UK's best PMI providers and tailor a policy with the perfect excess level for your health and your budget.
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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