TL;DR
As an FCA-authorised expert with over 900,000 policies of various kinds issued, WeCovr understands that navigating the world of private medical insurance in the UK can be confusing. Many people use the terms "health insurance" and "health cash plan" interchangeably, but they are fundamentally different products designed for very different needs. WeCovr's guide to these two products and which suits you best This comprehensive guide will demystify these two popular forms of health cover.
Key takeaways
- Pre-existing Conditions: Any illness or injury you had symptoms of, or received advice or treatment for, before your policy began.
- Chronic Conditions: Illnesses that are long-term and cannot be conventionally cured, only managed. Examples include diabetes, asthma, arthritis, and high blood pressure. The NHS is responsible for managing these long-term conditions.
- In-patient and Day-patient Treatment: This includes costs for surgery, hospital accommodation, nursing care, and specialist fees when you are admitted to a hospital.
- Out-patient Consultations and Tests: Covers appointments with specialists and diagnostic tests like MRI, CT, and PET scans before you are admitted to hospital.
- Advanced Cancer Care: This is a cornerstone of most PMI policies, offering access to the latest drugs and treatments, some of which may not be available on the NHS.
As an FCA-authorised expert with over 900,000 policies of various kinds issued, WeCovr understands that navigating the world of private medical insurance in the UK can be confusing. Many people use the terms "health insurance" and "health cash plan" interchangeably, but they are fundamentally different products designed for very different needs.
WeCovr's guide to these two products and which suits you best
This comprehensive guide will demystify these two popular forms of health cover. We’ll break down exactly what each one does, explore the costs and benefits, and provide real-life examples to help you decide which, if either, is the right choice for you and your family.
What is Private Medical Insurance (PMI)? A Shield Against the Unexpected
Private Medical Insurance, often called PMI or private health cover, is designed to be your safety net for significant, unforeseen medical issues. Its primary purpose is to cover the costs of private treatment for acute conditions that arise after you take 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. Think of conditions like a joint injury requiring surgery, cataracts, or a hernia.
The Critical Distinction: Acute vs. Chronic and Pre-existing Conditions
This is the single most important concept to grasp about private medical insurance in the UK:
Standard PMI policies are designed for acute conditions only. They do not cover pre-existing conditions or chronic conditions.
- Pre-existing Conditions: Any illness or injury you had symptoms of, or received advice or treatment for, before your policy began.
- Chronic Conditions: Illnesses that are long-term and cannot be conventionally cured, only managed. Examples include diabetes, asthma, arthritis, and high blood pressure. The NHS is responsible for managing these long-term conditions.
PMI gives you peace of mind that if you are diagnosed with a new, curable condition, you can bypass NHS waiting lists and receive prompt, private care in a comfortable setting.
What Does Private Health Cover Typically Include?
While policies vary, a comprehensive PMI plan usually covers:
- In-patient and Day-patient Treatment: This includes costs for surgery, hospital accommodation, nursing care, and specialist fees when you are admitted to a hospital.
- Out-patient Consultations and Tests: Covers appointments with specialists and diagnostic tests like MRI, CT, and PET scans before you are admitted to hospital.
- Advanced Cancer Care: This is a cornerstone of most PMI policies, offering access to the latest drugs and treatments, some of which may not be available on the NHS.
- Mental Health Support: Many modern policies now include cover for therapy and psychiatric treatment, reflecting a growing focus on mental wellbeing.
- Complementary Therapies: Post-operative physiotherapy or osteopathy to aid your recovery.
Many providers also offer optional add-ons for an extra premium, such as dental and optical cover, though these are often limited.
Key PMI Exclusions: What It Won't Cover
Besides chronic and pre-existing conditions, PMI generally excludes:
- Emergency Care: A&E visits, ambulance services, and immediate trauma care remain the domain of the NHS.
- Normal Pregnancy and Childbirth: Complications may be covered, but routine maternity care is not.
- Cosmetic Surgery: Procedures that are not medically necessary.
- Organ Transplants
- Drug and Alcohol Abuse Treatment
What is a Health Cash Plan? Your Partner for Everyday Health
A Health Cash Plan is a completely different beast. It is not insurance against a major medical catastrophe; instead, it's a simple, affordable way to manage and claim back money on your routine healthcare expenses.
Think of it as a health budgeting tool. You pay a small monthly premium, and in return, you can claim back a set amount of cash each year for specific, everyday treatments.
How Do Health Cash Plans Work?
The process is straightforward:
- You pay for your treatment: You visit your dentist, optician, or physiotherapist and pay the bill as usual.
- You submit your receipt: You send a copy of your receipt to the cash plan provider, usually via an online portal or app.
- You get cash back: The provider reimburses you for the cost, up to the annual limit for that specific benefit.
For example, if your plan offers £150 for dental cover and your check-up and filling cost £110, you can claim the full £110 back. You would still have £40 remaining in your dental pot for that year.
What Do Health Cash Plans Typically Cover?
Cash plans focus on routine, out-of-pocket expenses. Coverage is split into categories, each with its own annual limit.
- Dental: Check-ups, hygienist visits, fillings, crowns, and bridges.
- Optical: Eye tests, glasses, and contact lenses.
- Therapies: Physiotherapy, osteopathy, chiropractic treatment, and sometimes acupuncture or chiropody.
- Specialist Consultations: A contribution towards seeing a specialist privately.
- Prescription Charges: Reclaiming the cost of NHS prescriptions.
- Health Screenings: Contributions towards preventative health checks.
- Hospital Stays: A small cash payment for each night you spend in an NHS hospital.
Head-to-Head Comparison: PMI vs. Health Cash Plans
To make the distinction crystal clear, let's compare the two products side-by-side.
| Feature | Private Medical Insurance (PMI) | Health Cash Plan |
|---|---|---|
| Primary Purpose | Covers high-cost, unexpected medical events and surgery for acute conditions. | Helps budget for and reclaim costs of routine, everyday healthcare. |
| Coverage Scope | In-depth cover for major treatments (e.g., surgery, cancer care). | Cashback for predictable costs (e.g., dental, optical, therapies). |
| Cost | Higher premiums (£40 - £200+ per month), based on age, health, and cover level. | Lower premiums (£10 - £40 per month), often tiered by benefit level. |
| Main Benefit | Avoids NHS waiting lists for eligible treatments and provides choice over specialists and hospitals. | Makes routine healthcare more affordable and encourages preventative care. |
| Claim Process | Pre-authorisation required. The insurer pays the hospital/specialist directly. | You pay upfront, then claim the cash back by submitting a receipt. |
| Pre-existing Conditions | Not covered. | Often covered after a qualifying period, or sometimes immediately. |
| Financial Limit | High annual limits, often £1 million or more. Some are unlimited. | Modest annual limits per benefit category (e.g., £150 for dental). |
Real-Life Scenarios: Which Product Helps When?
Let's apply this to some common situations to see how each product performs.
Scenario 1: Ahmed Needs Knee Surgery
Ahmed, a 45-year-old active man, injures his knee playing football. His GP refers him to an NHS specialist, but the waiting list for an initial consultation is four months, and the wait for potential surgery is over a year.
- With Private Medical Insurance: Ahmed calls his PMI provider. They authorise a private consultation with an orthopaedic surgeon within a week. An MRI scan is performed a few days later, confirming a torn ligament. Surgery is scheduled for two weeks' time at a private hospital of his choice. His PMI policy covers the entire cost, minus his £250 excess. He also gets post-operative physiotherapy included.
- With a Health Cash Plan (illustrative): Ahmed's cash plan could help. He might be able to claim back around £250-£300 towards his post-operative physiotherapy sessions, but it would not cover the tens of thousands of pounds for the consultation, scan, and surgery.
Conclusion: For serious, acute conditions requiring specialist treatment or surgery, PMI is the essential product.
Scenario 2: The Taylor Family's Routine Year
The Taylor family consists of two parents and two children. They are all in good health but have regular check-ups.
-
Annual Costs without a Plan:
- Illustrative estimate: 4 x Dental check-ups & hygienist: £360
- Illustrative estimate: 2 x Eye tests & 1 new pair of glasses: £250
- Illustrative estimate: Mother's 4 physiotherapy sessions: £200
- Illustrative estimate: Total Annual Spend: £810
-
With a Health Cash Plan (illustrative): The Taylors pay £25 a month (£300 per year) for a family cash plan.
- Dental (illustrative): They claim back £75 per person (£300 total).
- Optical (illustrative): They claim back £150.
- Therapies (illustrative): They claim back £200.
- Illustrative estimate: Total Claimed Back: £650
- Net Result (illustrative): They spent £300 on the plan and got £650 back, saving them £350 on their expected healthcare costs.
Conclusion: For predictable, routine expenses, a Health Cash Plan is a highly effective budgeting tool.
Can You Have Both? The Complementary Approach
For complete peace of mind, many people choose to have both.
- PMI acts as the shield for major, high-cost health shocks.
- A Health Cash Plan acts as the wallet for managing everyday, predictable costs.
This combination ensures you are covered for almost every eventuality, from a dental filling to major heart surgery, without facing significant out-of-pocket expenses.
Understanding the Costs: How Premiums are Calculated in 2025
The cost of these two products is determined by very different factors.
Factors Influencing Private Medical Insurance Premiums
PMI pricing is complex and personalised. An expert PMI broker like WeCovr can help you find the best value by navigating these factors:
- Age: The single biggest factor. Premiums increase as you get older.
- Location: Costs are higher in areas with more expensive private hospitals, like Central London.
- Level of Cover: A basic policy covering only in-patient treatment will be cheaper than a comprehensive plan with full out-patient, mental health, and therapy cover.
- Excess (illustrative): This is the amount you agree to pay towards a claim. A higher excess (£500 or £1,000) will significantly lower your monthly premium.
- Hospital List: Choosing a policy with a limited list of local hospitals is cheaper than one giving you nationwide access.
- Underwriting: A "moratorium" policy, which automatically excludes conditions you've had in the last 5 years, is often cheaper than a "full medical underwriting" policy where you declare your entire history.
Illustrative Monthly PMI Premiums (2025)
These are for guidance only. Your quote will be specific to your circumstances.
| Age | Basic Cover (Mid-level Excess) | Comprehensive Cover (Low Excess) |
|---|---|---|
| 30 | £40 - £55 | £70 - £90 |
| 45 | £60 - £80 | £110 - £140 |
| 60 | £100 - £140 | £180 - £250+ |
Health Cash Plan Pricing: Simple and Affordable
Cash plan pricing is much simpler. It's usually based on pre-set levels of cover, and your age or medical history has little to no impact.
Illustrative Monthly Health Cash Plan Premiums (2025)
| Level | Monthly Cost (Individual) | Typical Annual Limits |
|---|---|---|
| Level 1 | £10 | £75 Dental, £75 Optical, £100 Therapies |
| Level 2 | £20 | £150 Dental, £150 Optical, £250 Therapies |
| Level 3 | £35 | £250 Dental, £250 Optical, £400 Therapies |
| Level 4 | £45 | £350 Dental, £350 Optical, £500+ Therapies |
The WeCovr Advantage: More Than Just Insurance
Choosing the right cover can feel overwhelming. At WeCovr, we not only simplify the process but also add significant value. As an independent and FCA-authorised broker, we compare policies from the UK's leading insurers to find the one that best fits your needs and budget, at no extra cost to you.
We are proud of our high customer satisfaction ratings, which reflect our commitment to clear, honest advice. When you choose a policy through us, you also gain access to exclusive benefits:
- Complimentary CalorieHero App: All our health and life insurance clients receive free access to CalorieHero, our AI-powered calorie and nutrition tracking app, to help you proactively manage your wellness.
- Multi-Policy Discounts: When you take out a private medical insurance policy with us, you can receive discounts on other essential cover, such as life insurance or income protection.
How to Choose the Right Cover for You
Ask yourself these key questions:
-
What is my main worry? Is it the risk of a long NHS wait for surgery, or is it the rising cost of dental and optical care?
- Long waits -> Consider PMI.
- Routine costs -> Consider a Health Cash Plan.
-
What is my monthly budget? If you have a limited budget but want some cover, a cash plan is a great starting point. If you can afford more and want comprehensive protection, PMI is the priority.
-
What is my health and lifestyle like? If you are very active and concerned about potential injuries, or have a family history of specific acute conditions, PMI might offer greater peace of mind.
-
Do I use routine services regularly? If you wear glasses, visit the dentist twice a year, and see a physio, a cash plan will almost certainly save you money.
Frequently Asked Questions (FAQ)
Here are answers to some of the most common questions we receive.
1. Can I get private medical insurance if I have a pre-existing condition? Yes, you can still get a policy, but it will not cover your pre-existing conditions. Insurers use two main methods: "Moratorium underwriting" automatically excludes anything you've had symptoms or treatment for in the past 5 years. "Full medical underwriting" requires you to declare your medical history, and the insurer will list specific exclusions on your policy from the start.
2. Do I still need the NHS if I have private medical insurance? Absolutely. The NHS remains essential for everyone. PMI does not cover emergencies (like a heart attack or car accident), management of chronic conditions (like diabetes), or routine GP services. PMI and the NHS work in parallel; one does not replace the other.
3. Is a health cash plan worth the money? A health cash plan is worth it if you are disciplined enough to use the benefits. Before buying, add up your typical annual spending on dental, optical, and therapy treatments. If this amount is greater than the annual cost of the plan, it represents excellent value and will save you money.
4. How does an 'excess' work with private medical insurance? An excess is a fixed amount you agree to pay towards the cost of a claim each policy year. For example, if you have a £250 excess and your surgery costs £8,000, you would pay the first £250, and your insurer would pay the remaining £7,750. Choosing a higher excess is a popular way to make your monthly premium more affordable.
Deciding between private medical insurance and a health cash plan comes down to your priorities, budget, and what gives you the most peace of mind. One protects against the large, unexpected shocks, while the other helps you manage the small, predictable ones.
Ready to explore your options and find the right protection for you and your family?
The expert team at WeCovr is here to help. We provide free, no-obligation quotes and impartial advice to help you compare the UK's best PMI providers.
Sources
- Office for National Statistics (ONS): Mortality, earnings, and household statistics.
- Financial Conduct Authority (FCA): Insurance and consumer protection guidance.
- Association of British Insurers (ABI): Life insurance and protection market publications.
- HMRC: Tax treatment guidance for relevant protection and benefits products.
