TL;DR
As an FCA-authorised broker that has helped arrange over 900,000 policies, WeCovr understands that navigating the world of private medical insurance in the UK can feel complex. This expert guide demystifies one of the most critical factors in your policy's cost: the excess. How excess choices from £100–£1,000 affect premiums When you buy private health insurance, the 'excess' is one of the most powerful tools you have to control your monthly or annual premium.
Key takeaways
- Higher Excess = Lower Premium
- Lower Excess = Higher Premium
- Central London: Has the most expensive private hospitals, leading to the highest premiums.
- Major Cities (e.g., Manchester, Birmingham): Costs are moderate.
- Scotland, Northern Ireland & Rural Areas: Often have the lowest premiums due to lower private treatment costs.
As an FCA-authorised broker that has helped arrange over 900,000 policies, WeCovr understands that navigating the world of private medical insurance in the UK can feel complex. This expert guide demystifies one of the most critical factors in your policy's cost: the excess.
How excess choices from £100–£1,000 affect premiums
When you buy private health insurance, the 'excess' is one of the most powerful tools you have to control your monthly or annual premium. But what exactly is it, and how does your choice truly impact your wallet?
In simple terms, an excess (also known as a deductible) is the amount of money you agree to pay towards the cost of your treatment before your insurance provider pays the rest. It's a way of sharing the cost of a claim.
The relationship between your excess and your premium is an inverse one:
- Higher Excess = Lower Premium
- Lower Excess = Higher Premium
Think of it like car insurance. If you agree to pay the first £500 of any claim, your insurer sees you as a lower risk, and they reward you with a cheaper policy. The same principle applies to private medical insurance (PMI). By choosing a higher excess, you are telling the insurer you will handle the smaller claims yourself, reducing their potential payout and, in turn, your premium.
Most UK health insurance policies apply the excess on a per-policy-year basis. This is a crucial detail. It means you only pay the excess once per year, regardless of how many separate claims you make. Once you've paid your chosen excess amount, all subsequent eligible claims for the rest of that policy year are typically covered in full by your insurer (up to your policy limits).
The Financial Impact of Excess at a Glance
Let's look at an illustrative example for a 40-year-old non-smoker in Manchester seeking mid-range cover. These figures are for demonstration purposes only, as your actual quote will depend on numerous personal factors.
| Excess Chosen | Illustrative Monthly Premium | Illustrative Annual Premium | Potential Annual Saving (vs. £100 Excess) |
|---|---|---|---|
| £100 | £75 | £900 | £0 |
| £250 | £68 | £816 | £84 |
| £500 | £60 | £720 | £180 |
| £1,000 | £50 | £600 | £300 |
As the table shows, increasing your excess from £100 to £1,000 could potentially save you £300 a year on premiums. This trade-off is central to tailoring a policy to your budget. (illustrative estimate)
Understanding the Key Factors That Determine Your PMI Cost
While the excess is a major lever, it's just one piece of the puzzle. The final cost of your private health cover is determined by a combination of personal and policy-related factors.
1. Your Age
Age is the single most significant factor. As we get older, the statistical likelihood of needing medical treatment increases. Insurers price their policies based on this risk, so premiums for a 55-year-old will be considerably higher than for a 25-year-old. Premiums often see noticeable increases at milestone birthdays (e.g., 30, 40, 50, 60).
2. Your Location
Where you live in the UK—your postcode—directly affects your premium. This is due to the varying costs of private medical care across the country.
- Central London: Has the most expensive private hospitals, leading to the highest premiums.
- Major Cities (e.g., Manchester, Birmingham): Costs are moderate.
- Scotland, Northern Ireland & Rural Areas: Often have the lowest premiums due to lower private treatment costs.
Insurers use "hospital lists" to manage this. A policy with a nationwide list including top London hospitals will cost more than one with a more restricted, local list.
3. Your Medical History and Lifestyle
- Smoking: Smokers and recent vapers will always pay more for health insurance, often 30-50% more than non-smokers. This reflects the well-documented health risks associated with smoking.
- Underwriting: This is how insurers assess your medical history. The two main types are:
- Moratorium Underwriting: This is the most common type. You don't declare your full medical history upfront. Instead, the policy automatically excludes treatment for any condition you've had symptoms, advice, or treatment for in the five years before joining. However, if you go two full years on the policy without any issues relating to that condition, it may become eligible for cover.
- Full Medical Underwriting (FMU): You complete a detailed health questionnaire. The insurer then decides what they will and will not cover from the outset. This can sometimes be beneficial if you have a historic condition that is no longer an issue, as the insurer might agree to cover it.
4. The Level of Cover You Choose
This is about how comprehensive your policy is. Insurers typically offer tiered plans:
- Basic/Core Cover: Covers the big expenses. This includes in-patient and day-patient treatment (where you need a hospital bed). It's designed as a safety net for major procedures, helping you bypass long NHS waiting lists. According to NHS England data, the median waiting time for consultant-led elective care was 14.5 weeks in July 2024.
- Mid-Range Cover: Includes everything in a basic plan plus a limited amount of out-patient cover. This might be a set financial limit (e.g., £1,000 for consultations and tests) or a specific number of sessions.
- Comprehensive Cover: Offers extensive in-patient and out-patient cover. It often includes benefits like mental health support, therapies (physiotherapy, osteopathy), and options to add dental and optical cover.
An expert PMI broker, like WeCovr, can help you compare these different levels across multiple providers to find the perfect balance between cover and cost.
A Deeper Dive into Excess Options: Which Level is Right for You?
Choosing an excess isn't just about finding the lowest premium; it's about finding the right balance for your financial situation. You need to be comfortable paying that amount if you need to make a claim.
Let's explore the common excess levels in more detail.
Excess Level Breakdown and Suitability
| Excess Level | Typical Candidate | Pros | Cons |
|---|---|---|---|
| £0–£100 | Someone who wants maximum peace of mind and minimal out-of-pocket costs when claiming. | Predictable costs; you pay very little or nothing when you need treatment. | The highest monthly premiums. |
| £250 | The most popular choice. A good balance between manageable premiums and a reasonable excess. | Offers a noticeable premium saving compared to a £0 or £100 excess. | You still need to find £250 if you make a claim. |
| £500 | Someone who is generally healthy and wants to significantly reduce their monthly costs. | Substantial premium savings, making comprehensive cover more affordable. | £500 can be a significant upfront cost for many people. |
| £1,000+ | Someone with a healthy emergency fund who sees PMI as a safeguard against major costs. | The lowest possible premiums, offering maximum long-term savings. | You must have £1,000 readily available to pay towards your treatment. |
Real-Life Scenarios: How Excess Works in Practice
Scenario 1: Amira, £250 Excess Amira, a 35-year-old graphic designer, has a policy with a £250 annual excess. In May, she develops severe shoulder pain and is referred by her GP to a specialist. (illustrative estimate)
- Specialist Consultation (illustrative): £250
- MRI Scan (illustrative): £750
- Total Cost (illustrative): £1,000
Amira pays the first £250 of the consultation fee herself. Her insurer covers the remaining £750 for the MRI scan. Her annual excess is now met. In October of the same year, she needs an unrelated procedure costing £3,000. Because her annual excess has already been paid, her insurer covers the full £3,000. (illustrative estimate)
Scenario 2: Ben, £1,000 Excess Ben, a 50-year-old project manager, opted for a £1,000 excess to keep his premiums low. He requires a hernia repair operation. (illustrative estimate)
- Total Cost of Treatment (consultation, surgery, hospital stay) (illustrative): £4,500
Ben pays the first £1,000 directly to the hospital or specialist. His insurer then pays the remaining £3,500. While his out-of-pocket cost is higher than Amira's, his monthly premium has been significantly lower throughout the year, which might have saved him hundreds of pounds already. (illustrative estimate)
What Does UK Private Medical Insurance Actually Cover?
It is absolutely vital to understand the fundamental purpose of private medical insurance in the UK.
PMI is designed to cover acute conditions that arise after you take out your policy.
- An acute condition is a disease, illness, or injury that is likely to respond quickly to treatment and lead to a full recovery (e.g., cataracts, joint replacement, gallstones, hernias).
- A chronic condition is a long-term illness that cannot be cured, only managed (e.g., diabetes, asthma, high blood pressure, arthritis). Standard private medical insurance does not cover the management of chronic conditions. You will continue to receive care for these through the NHS.
Furthermore, pre-existing conditions are excluded. A pre-existing condition is anything you have had symptoms, advice, or treatment for in the years leading up to your policy start date (typically 5 years). Under moratorium underwriting, if you remain symptom-free for two continuous years after your policy begins, that condition may become eligible for cover.
Typical Cover Inclusions and Exclusions
| What's Typically Covered? | What's Typically Excluded? |
|---|---|
| In-patient and Day-patient Treatment (hospital stays) | Chronic Conditions (e.g., diabetes, asthma) |
| Surgery (as an in-patient or day-patient) | Pre-existing Conditions (for at least the first 2 years) |
| Specialist Consultations (with out-patient cover) | Accident & Emergency (A&E) Visits |
| Diagnostic Tests (e.g., MRI, CT, PET scans) | Routine Pregnancy and Childbirth |
| Cancer Treatment (often extensive, including chemo/radiotherapy) | Cosmetic Surgery (unless for reconstructive purposes) |
| Mental Health Support (with mid-range/comprehensive cover) | Organ Transplants |
| Physiotherapy & Other Therapies (as an add-on or on comprehensive plans) | Self-inflicted Injuries |
How to Save Money on Your Private Health Insurance Premiums
Beyond choosing a higher excess, there are several other effective strategies to make your private health cover more affordable.
- Select a Guided Hospital List: Instead of a list that includes every private hospital in the UK, choose one that is limited to a network selected by your insurer. This can offer significant savings, especially if it excludes the most expensive Central London facilities.
- Consider a "6-Week Wait" Option: This is a fantastic cost-saving measure. With this option, if you need in-patient treatment, you will first check the relevant NHS waiting list. If the NHS can treat you within six weeks, you use the NHS. If the wait is longer than six weeks, your private policy kicks in immediately. This reduces the insurer's risk and can lower your premium by 20-30%.
- Pay Annually: Most insurers offer a discount (typically around 5%) if you pay your premium in one annual lump sum rather than in monthly instalments.
- Review Your Cover Level: Do you really need comprehensive cover right now? Starting with a basic in-patient-only policy provides a crucial safety net against major surgical waits at a much lower cost. You can always look to upgrade your cover in the future.
- Embrace a Healthy Lifestyle: Insurers reward healthy living. Non-smokers pay substantially less. Many providers also have wellness programmes that offer discounts and rewards for tracking your activity, getting health checks, and maintaining a healthy diet.
- Use an Expert PMI Broker: This is arguably the most effective step. A specialist broker like WeCovr has access to the entire market and can compare policies from all the leading UK providers (like Bupa, AXA Health, Aviva, and Vitality) in minutes. We do the hard work for you, explaining the differences in cover and finding a policy that fits your specific needs and budget—all at no cost to you.
The Added Value of Wellness Programmes and Modern Benefits
Modern private health insurance is evolving. It's no longer just about treatment when you're ill; it's about helping you stay healthy in the first place. Many leading insurers now include valuable wellness benefits and rewards programmes designed to encourage a healthier lifestyle.
These can include:
- Discounted gym memberships
- Wearable tech deals (e.g., Apple Watch, Fitbit)
- Free cinema tickets or coffees for hitting activity goals
- Access to virtual GP services 24/7
- Mental health support apps and phone lines
At WeCovr, we enhance this value proposition even further. When you arrange your private medical insurance through us, you also get:
- Complimentary access to CalorieHero: Our proprietary AI-powered calorie and nutrition tracking app to help you stay on top of your health goals.
- Exclusive discounts: On other insurance products you might need, such as life insurance or income protection, helping you save more across the board.
Frequently Asked Questions (FAQs) About UK Private Health Insurance
Is it cheaper to choose a higher excess on my private health insurance?
Does UK private health insurance cover pre-existing conditions?
What is the average cost of private medical insurance in the UK?
Can I add my family to my private health insurance policy?
Take Control of Your Health and Your Premiums Today
Understanding how excess choices and other factors influence your premium empowers you to build a private health insurance policy that truly works for you. You don't have to navigate the market alone.
At WeCovr, our team of friendly, independent experts is here to provide clear, jargon-free advice. We'll compare leading insurers to find you the right cover at the right price, ensuring you have peace of mind without breaking the bank.
[Get Your Free, No-Obligation PMI Quote Today and Compare Your Options in Minutes]
Sources
- Department for Transport (DfT): Road safety and transport statistics.
- DVLA / DVSA: UK vehicle and driving regulatory guidance.
- Association of British Insurers (ABI): Motor insurance market and claims publications.
- Financial Conduct Authority (FCA): Insurance conduct and consumer information guidance.
