PMI Renewal Increases UK
Receiving your annual private medical insurance renewal can be a moment of dread. As FCA-authorised experts at WeCovr, who have helped arrange over 900,000 policies, we understand. This guide explains why your private health cover in the UK gets more expensive and what powerful steps you can take.
Why your premium rises and what to do about it
It's one of the most common questions we hear: "I haven't even claimed, so why has my private medical insurance premium gone up again?" The yearly price hike can feel frustrating and unfair, especially when household budgets are already stretched.
The truth is, several factors are at play, and most are beyond your direct control. However, understanding them is the first step towards taking back control. This comprehensive guide will demystify the reasons behind renewal increases and provide you with a clear, actionable plan to ensure you're getting the best possible value from your health cover.
The Main Drivers of PMI Premium Increases
Your renewal price isn't arbitrary. It's calculated based on a combination of risk factors, industry-wide trends, and government taxes. Let's break down the four primary drivers.
1. Age-Related Increases: The Biggest Factor
This is the most significant reason for your premium rising each year. From an insurer's perspective, the statistical likelihood of needing medical treatment increases as we get older. Insurers build these age-related price increases into their models.
Even if you are in perfect health and haven't made a claim, you will move into a new, slightly higher-risk age bracket each year. The increases are not linear; they tend to accelerate as you move into your 50s, 60s, and beyond.
| Age Bracket | Typical Annual Premium Increase (Age Only) |
|---|---|
| 30-39 | 3% - 5% |
| 40-49 | 5% - 8% |
| 50-59 | 7% - 12% |
| 60+ | 10% - 15%+ |
Note: These are illustrative industry averages. Your specific increase will depend on your insurer and policy.
2. Medical Inflation: The Hidden Cost Driver
Medical inflation is not the same as the general inflation you hear about on the news (the Consumer Price Index or CPI). It refers to the rising cost of providing private medical care, and it consistently outpaces general inflation by a significant margin.
Analysts in the UK's private healthcare sector estimate that medical inflation regularly runs between 8% and 12% per year. This is in stark contrast to the ONS-reported CPI, which typically hovers around the government's 2% target.
What fuels medical inflation?
- New Technologies & Treatments: Ground-breaking diagnostic tools (like advanced MRI scanners), new surgical techniques, and innovative cancer drugs are incredibly expensive. Your policy is priced to give you access to these cutting-edge treatments should you need them.
- Increased Specialist Fees: The fees charged by top consultants and surgeons rise each year.
- Rising Hospital Costs: The cost of running private hospitals, including nursing staff, energy, and equipment, all contribute to the price insurers have to pay for your treatment.
- Increased Demand: With NHS waiting lists remaining at historically high levels, more people are turning to private healthcare, which increases overall demand and, consequently, costs. According to recent NHS England data, the waiting list for consultant-led elective care stands at over 7.5 million.
3. Your Claims History (and No Claims Discount)
This is the part of your premium that is directly influenced by your own usage of the policy. If you make a claim, your insurer may apply a "claims loading" at renewal. This means they now view you as having a higher probability of claiming again in the future.
Conversely, if you do not claim, you will typically earn a "No Claims Discount" (NCD). This works similarly to car insurance. The NCD is a percentage discount applied to your premium, which increases for each consecutive year you don't claim, up to a maximum level (usually around 60-75%).
How a Claim Affects Your NCD:
Imagine your insurer has an NCD scale from 0 to 10. You might start at Level 4.
- No Claim Year: You move up to Level 5, and your discount increases.
- Claim Year: You are moved back down the scale, for example, to Level 2.
This "step-back" means you lose a portion of your discount, resulting in a higher premium, even before factoring in age and medical inflation. So, a renewal increase after a claim is a double whammy: the loss of NCD plus the other inflationary factors.
4. Insurance Premium Tax (IPT)
This is a tax levied by the UK government on all general insurance policies, including private medical insurance. It is currently set at a standard rate of 12%.
This means that for every £100 of your base premium, the government adds £12 on top. If your base premium increases by £50 due to age and inflation, the IPT portion of that increase is an extra £6. Any future rise in the IPT rate will directly translate to higher premiums for everyone.
A Critical Note: What UK PMI Does Not Cover
Before we explore how to manage costs, it's vital to be absolutely clear on the scope of private medical insurance in the UK. This is one of the biggest areas of misunderstanding for consumers.
Standard UK PMI is designed to cover acute conditions that arise after you have taken out the policy.
- An acute condition is 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, hernia repair, or treatment for a specific cancer.
PMI is not designed for:
- Pre-existing Conditions: Any illness, disease, or injury for which you have experienced symptoms, received medication, or sought advice before the start of your policy.
- Chronic Conditions: Illnesses that cannot be cured and require long-term management rather than a short-term fix. Examples include diabetes, asthma, high blood pressure, and arthritis. While the initial diagnosis of a chronic condition might be covered, the ongoing, long-term management will not be.
Understanding this distinction is crucial. PMI is your safety net for unexpected, treatable health issues, complementing the essential role of the NHS in managing long-term and emergency care.
Practical Steps to Manage Your Renewal Increase
Receiving a high renewal quote doesn't mean you have to accept it. You have several powerful options to lower your premium without necessarily sacrificing the cover that matters most to you.
1. Review Your Level of Cover
Insurers typically offer tiered policies. If you are on a comprehensive plan, you might be paying for benefits you don't need. Consider if a more standard or basic plan could meet your needs.
| Cover Level | Typical Inclusions | Best For... |
|---|---|---|
| Comprehensive | Full inpatient, day-patient, and outpatient cover. Therapies, mental health, dental. | Those wanting the highest level of reassurance with minimal shortfalls. |
| Standard | Full inpatient and day-patient cover. Limited outpatient cover (e.g., up to £1,000). | A strong balance of cover and cost, covering the 'big ticket' hospital stays. |
| Basic/Core | Inpatient and day-patient cover only. No outpatient consultations or diagnostics. | Those on a tight budget who primarily want cover for surgery and hospital treatment. |
2. Increase Your Excess
An excess is the amount you agree to pay towards the cost of a claim. For example, if you have a £250 excess and receive treatment costing £3,000, you pay the first £250, and the insurer pays the remaining £2,750.
Opting for a higher excess is a guaranteed way to reduce your premium. You are taking on a little more of the initial financial risk, so the insurer rewards you with a lower price.
| Excess Level | Illustrative Monthly Premium |
|---|---|
| £0 | £120 |
| £250 | £105 |
| £500 | £90 |
| £1,000 | £75 |
Note: These are for illustration only. Savings vary between insurers.
3. Add a "6-Week Wait" Option
This is one of the most effective cost-saving measures. A 6-week wait option means that for any eligible inpatient treatment, you will first check the relevant NHS waiting list.
- If the NHS can treat you within 6 weeks, you use the NHS.
- If the NHS wait is longer than 6 weeks, your private medical insurance policy kicks in immediately.
This option can reduce your premium by 20-30% because it removes the cost of treating conditions where the NHS provides timely care anyway. You retain the peace of mind that you will never wait more than 6 weeks for essential treatment.
4. Re-broking: Your Most Powerful Tool
In the insurance world, loyalty is rarely rewarded. Your current insurer's renewal price is often not the most competitive rate available on the market. This is where using an independent PMI broker like WeCovr becomes your greatest advantage.
As expert brokers, we have access to policies and rates from all the leading UK insurers. Our service, which is at no cost to you, involves:
- A Full Market Review: We compare your renewal offer against the latest products from providers like Bupa, AXA Health, Aviva, Vitality, and WPA.
- Like-for-Like Comparison: We ensure we are comparing apples with apples, so you understand exactly how a new policy stacks up against your current one.
- Expert Advice: We explain the pros and cons of each option, helping you make an informed decision based on your budget and healthcare priorities.
- Seamless Switching: If you decide to switch, we handle all the paperwork for you, ensuring a smooth transition with no loss of cover.
Many customers are amazed to find they can get identical, or even superior, cover from a different top-tier provider for significantly less than their renewal price.
5. Focus on Your Health and Wellbeing
This might seem like a long-term strategy, but it's increasingly relevant. A healthier lifestyle reduces your risk of needing to claim, which helps protect your No Claims Discount.
Furthermore, many of the best PMI providers now actively reward healthy living with premium discounts, shopping vouchers, and free coffee. They track your activity through apps and wearables and reward you for hitting targets.
Simple steps can make a big difference:
- Diet: A balanced diet rich in fruits, vegetables, and whole grains can reduce the risk of many conditions. As a WeCovr client, you get complimentary access to our AI-powered calorie and nutrition tracking app, CalorieHero, to help you stay on track.
- Activity: The NHS recommends at least 150 minutes of moderate-intensity activity a week. This could be brisk walking, cycling, or swimming.
- Sleep: Aim for 7-9 hours of quality sleep per night. Poor sleep is linked to a range of health issues.
- Stress: Chronic stress can impact your physical health. Practices like mindfulness, yoga, or simply spending time in nature can help.
By taking proactive steps to manage your health, you not only improve your quality of life but also make yourself a more attractive customer to insurers. Clients who purchase PMI or life insurance through us can also benefit from discounts on other types of cover, further enhancing value.
Switching PMI Provider: Is It Complicated?
A common fear that stops people from saving money is the worry about switching. What if a condition developed while you were on your old policy? Will it be excluded if you move?
This is a valid concern, but it's easily solved by a process known as "Continued Personal Medical Exclusions" (CPME) underwriting, often simply called a "switch" basis.
When you use a broker like WeCovr to switch policies, we can ensure your new insurer takes you on a CPME basis. This means:
You carry over the underwriting terms from your old policy. Any conditions that were covered by your old policy will be covered by your new one. Any exclusions you had will also carry over.
This protects your continuity of cover, allowing you to switch providers and save money without the fear of losing protection for medical issues that have arisen since you first took out a policy.
Underwriting Options at a Glance
| Underwriting Type | How It Works | Best For... |
|---|---|---|
| Full Medical Underwriting (FMU) | You complete a detailed health questionnaire. The insurer may exclude specific conditions from the outset. | People who want absolute clarity on what is and isn't covered from day one. |
| Moratorium (Mori) | No initial health questions. Any condition you've had in the 5 years before joining is automatically excluded for the first 2 years. | Healthy individuals who want a quick and simple application process. |
| Continued (CPME/Switch) | Your new insurer inherits the exclusions from your previous policy. No new medical exclusions are added for post-policy conditions. | Anyone with an existing PMI policy who wants to switch providers to get a better price. |
Real-Life Example: How WeCovr Helped a Client Save
Let's look at a typical scenario.
The Client: Sarah, a 54-year-old marketing manager from Bristol. She had a comprehensive PMI policy with a major insurer. She hadn't claimed in three years.
The Problem: Her renewal notice arrived. Her premium was increasing from £115 per month to £150 per month – a 30% jump. She was shocked and considering cancelling her cover altogether.
The WeCovr Solution:
- Contact: Sarah contacted WeCovr for a free, no-obligation market review.
- Review: Our expert adviser discussed her needs. Her priority was strong cancer cover and quick access to diagnostics, but she was happy to consider a small excess.
- Comparison: We compared her renewal offer against the market. We found another leading provider offering a near-identical policy, but with the addition of a £250 excess.
- The Result: The new policy, on a CPME/switch basis to protect her continuity of cover, was just £118 per month.
- The Saving: Sarah saved £32 per month, or £384 per year, compared to her renewal quote. She kept her peace of mind and received a policy from another highly-rated provider, all handled seamlessly by her WeCovr adviser. Our high customer satisfaction ratings are built on outcomes just like this.
This is not an unusual case. Significant savings are often available for those who take the time to compare the market rather than simply accepting their renewal increase.
Will making a claim always increase my PMI premium?
Can I switch my private health cover if I have a new medical condition?
What is the difference between a chronic and an acute condition?
Is it cheaper to buy PMI directly from an insurer or through a broker?
Take Control of Your PMI Renewal Today
A renewal increase is a prompt to action, not a reason to despair. By understanding the factors at play and exploring your options, you can ensure your private medical insurance remains affordable and continues to provide the peace of mind you deserve.
Don't just accept your renewal price. Let an expert do the hard work for you.
Contact WeCovr today for a free, no-obligation review of your private medical insurance. Our friendly, expert team can compare the market in minutes and show you how much you could save.
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.
By tapping the button below, you can book a free call with them in less than 30 seconds right now:
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Who Are WeCovr?
WeCovr is an insurance specialist for people valuing their peace of mind and a great service.👍 WeCovr will help you get your private medical insurance, life insurance, critical illness insurance and others in no time thanks to our wonderful super-friendly experts ready to assist you every step of the way.
Just a quick and simple form and an easy conversation with one of our experts and your valuable insurance policy is in place for that needed peace of mind!