Understanding Health Insurance Excess 2026 Guide
As FCA-authorised private medical insurance experts, WeCovr has helped over 800,000 people secure the right cover. This guide demystifies one of the most powerful tools for managing your premium: the policy excess. Understanding how it works is your first step towards affordable, high-quality private health cover in the UK.
WeCovr's guide to optimizing your excess to lower your health insurance premium
Private medical insurance (PMI) offers peace of mind, providing prompt access to high-quality diagnosis and treatment when you need it most. However, many people are concerned about the cost. The good news is that you have significant control over your premium. One of the most direct ways to make your policy more affordable is by choosing the right excess.
This comprehensive guide will walk you through everything you need to know about health insurance excess for 2026. We'll explain what it is, how it works, and how you can tailor it to fit your budget without compromising on the quality of your care.
What Exactly is a Health Insurance Excess?
In simple terms, an excess is a fixed amount of money you agree to pay towards the cost of your treatment before your insurance provider pays the rest. It's your contribution to a claim.
Think of it like the excess on your car or home insurance. If you have a £250 excess on your car insurance and you have an accident that costs £2,000 to repair, you pay the first £250, and your insurer covers the remaining £1,750. Health insurance excess works in precisely the same way.
- Your Contribution: The amount you pay.
- Insurer's Contribution: The remaining balance of the eligible treatment cost, up to your policy limits.
By agreeing to pay a small portion of the costs yourself, you are sharing a small amount of the financial risk with the insurer. In return, they reward you with a lower annual or monthly premium. The higher the excess you choose, the lower your premium will be.
How Does Excess Work in Practice? A Real-Life Example
Let's make this tangible with a common scenario.
Meet David: David is a 45-year-old marketing manager from Manchester. He has a private medical insurance policy with a £250 excess.
He develops persistent knee pain and his GP refers him to a specialist. Here’s how his PMI policy and excess come into play:
- Initial Consultation: David sees a private orthopaedic consultant. The consultation fee is £200. Since this is less than his £250 excess, David pays the consultant directly. He has now used £200 of his £250 excess for the year (assuming a 'per year' excess).
- Diagnostic Scan: The consultant recommends an MRI scan to diagnose the problem. The scan costs £750.
- Paying for the Scan: David needs to pay the remaining £50 of his excess (£250 total excess - £200 already paid). His insurance provider covers the other £700.
- Surgery: The scan reveals a torn meniscus requiring keyhole surgery. The total cost for the surgery, including hospital fees and the surgeon's time, is £4,500.
- Insurer Pays in Full: Because David has now fully paid his £250 excess for the policy year, his insurer covers the entire £4,500 for the surgery.
Total Cost Breakdown:
- Total Cost of Treatment: £200 + £750 + £4,500 = £5,450
- David Pays (His Excess): £200 + £50 = £250
- His Insurer Pays: £700 + £4,500 = £5,200
By choosing a £250 excess, David made his annual premium more affordable and, when he needed significant treatment, his out-of-pocket cost was capped at a manageable amount.
The Two Main Types of Excess: Per Claim vs. Per Policy Year
It's crucial to understand how your excess is applied, as it differs between insurers. The two main options are:
-
Excess Per Policy Year (Most Common): You only pay your excess once per policy year, regardless of how many separate claims you make. Once you've paid the agreed amount (e.g., £250), all subsequent eligible treatment for the rest of that policy year is covered in full by your insurer. This is the most popular and often most cost-effective option.
-
Excess Per Claim / Per Condition: You pay the excess for each new, unrelated claim you make. For example, if you claim for knee surgery in May and then need treatment for a separate back problem in October, you would have to pay the excess for both claims. This can become expensive if you are unlucky enough to need treatment for multiple conditions in a single year.
Comparison Table: Per Year vs. Per Claim Excess
| Feature | Excess Per Policy Year | Excess Per Claim / Per Condition |
|---|---|---|
| How it Works | You pay the excess amount only once in a policy year. | You pay the excess for each new, unrelated medical condition you claim for. |
| Best For | People who want predictable costs and may have multiple small claims. | Can be slightly cheaper initially, but riskier if multiple claims are needed. |
| Example | £500 excess. Claim 1 for £2000 (you pay £500). Claim 2 for £3000 (you pay £0). | £500 excess. Claim 1 for £2000 (you pay £500). Claim 2 for £3000 (you pay £500). |
| Our View | Generally the preferred and more common option for its simplicity and predictability. | Less common and can lead to unexpected costs. We generally recommend a "per year" excess. |
At WeCovr, we typically find that a "per policy year" excess offers better value and peace of mind for the vast majority of our clients.
The Golden Rule: How Increasing Your Excess Lowers Your Premium
The relationship between your excess and your premium is inverse. This is the fundamental principle you need to grasp to optimise your policy.
- Higher Excess = Lower Premium
- Lower Excess = Higher Premium
Why? Because a higher excess means you're agreeing to take on more of the initial financial risk. This reduces the insurer's potential payout, especially for smaller claims, so they can offer you a more competitive price.
Illustrative Savings: The Impact of Different Excess Levels
Let's look at how changing your excess could affect a sample premium. The exact savings will vary by insurer, your age, location, and level of cover, but this table provides a strong indication.
Let's assume a base annual premium of £1,500 with a £0 excess.
| Excess Level Chosen | Potential Premium Reduction (Approx.) | New Estimated Annual Premium |
|---|---|---|
| £0 | 0% | £1,500 |
| £100 | 5-10% | £1,350 - £1,425 |
| £250 | 15-20% | £1,200 - £1,275 |
| £500 | 25-35% | £975 - £1,125 |
| £1,000 | 40-50% | £750 - £900 |
| £3,000 | 50-60% | £600 - £750 |
Disclaimer: These are illustrative figures. An expert PMI broker like WeCovr can provide you with precise quotes from the UK's leading insurers.
As you can see, opting for a £500 excess instead of zero could save you hundreds of pounds a year. A £1,000 excess could potentially halve your premium.
How to Choose the Right Excess Level for You
The "best" excess level is a personal choice that depends on your financial situation and attitude to risk. Here are the key questions to ask yourself:
-
What can I comfortably afford to pay in an emergency? Your excess should be an amount you could pay at short notice without causing financial hardship. Don't choose a £1,000 excess if you don't have that amount readily available in savings.
-
What is my main reason for having PMI?
- For major health issues: If you're primarily concerned about getting fast treatment for serious conditions like cancer or heart surgery, a higher excess (e.g., £500 or £1,000) makes a lot of sense. Your main goal is to have the multi-thousand-pound bills covered, and paying the first £1,000 is a small price for that security.
- For regular use and diagnostics: If you anticipate using the policy for smaller claims like consultations and physio sessions, a lower excess (e.g., £100 or £250) might be more suitable, so you don't have to pay out-of-pocket for every minor issue.
-
How much do I want to save on my premium? Balance your desire for a lower premium with the reality of what you'd have to pay. Look at the table above and decide where your comfort level lies. For many, the sweet spot is between £250 and £500, as it offers significant premium savings while keeping the one-off payment manageable.
A Critical Note: What UK Private Medical Insurance Does NOT Cover
It is vital to understand the limitations of standard private medical insurance in the UK. Policies are designed to cover acute conditions that begin after your policy starts.
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., a cataract, a hernia, a broken bone).
Standard PMI policies do not cover:
- Pre-existing conditions: Any medical condition you had symptoms of, received advice for, or had treatment for before you took out the policy.
- Chronic conditions: Conditions that are long-term and cannot be cured, only managed. This includes things like diabetes, asthma, high blood pressure, and arthritis. While the initial diagnosis of a chronic condition might be covered, the ongoing management will typically be handed back to the NHS.
This is a fundamental rule across the entire UK PMI market. Your policy is for new, curable health problems that arise unexpectedly.
Beyond Excess: Other Levers to Pull to Reduce Your Premium
While choosing the right excess is a powerful tool, it's not the only one. When you work with a PMI broker like WeCovr, we explore all the options to tailor a policy to your budget.
- The Hospital List: Insurers have tiered hospital lists. Choosing a list that excludes the most expensive central London hospitals can reduce your premium significantly.
- The 6-Week Option: This is a popular cost-saving feature. If the NHS can provide the inpatient treatment you need within six weeks of when it is required, you agree to use the NHS. If the NHS waiting list is longer than six weeks (which is increasingly common), your private cover kicks in. According to NHS England data, the median waiting time for consultant-led elective care was 15.1 weeks in September 2025, making this a highly valuable option.
- Reduced Outpatient Cover: You can choose to limit the financial cover for outpatient services like consultations and diagnostic scans. You could, for example, cap it at £500 or £1,000 per year.
- No-Claims Discount Protection: Similar to car insurance, most PMI providers offer a no-claims discount that grows each year you don't make a claim.
- Guided Consultant Lists: Some insurers, like Aviva, offer a "guided" option where you choose from a smaller, pre-approved list of specialists in return for a lower premium.
Policy Levers Comparison Table
| Lever | How it Saves Money | Who it's Good For |
|---|---|---|
| Higher Excess | You pay more of the initial cost of a claim. | Those who want to cover major costs and can afford the initial payment. |
| 6-Week Option | You use the NHS if its waiting list is short. | People happy to rely on the NHS for faster treatment, but want a private back-up. |
| Restricted Hospital List | Excludes the most expensive private hospitals from your cover. | Anyone living outside central London or willing to travel for treatment. |
| Limited Outpatient Cover | Puts a financial cap on pre-treatment diagnostics and consultations. | People who mainly want cover for inpatient surgery and hospital stays. |
An independent broker can mix and match these options across different providers to find the perfect combination of cover and cost for your specific needs.
The WeCovr Advantage: Expert Guidance and Extra Value
Navigating the complexities of hospital lists, excess options, and underwriting can be daunting. This is where WeCovr excels. As an independent and FCA-authorised PMI broker, we work for you, not the insurers.
Our service is provided at no cost to you. We receive a commission from the insurer you choose, but our advice remains 100% impartial. With high customer satisfaction ratings, our focus is on finding the best PMI provider and policy for your unique circumstances.
When you choose to arrange your cover through us, you also get more than just a policy:
- Complimentary Access to CalorieHero: All our PMI and Life Insurance clients receive free access to our AI-powered calorie and nutrition tracking app, CalorieHero. It's a fantastic tool to help you manage your diet and stay healthy.
- Discounts on Other Insurance: We value your loyalty. Our clients often receive preferential rates on other types of cover they need, such as life insurance or income protection.
- Market-Wide Comparison: We compare policies from all the leading UK insurers, including Bupa, AXA Health, Aviva, Vitality, and The Exeter, ensuring you get a fair and comprehensive view of the market.
A Proactive Approach: Health and Wellness to Lower Long-Term Costs
The cheapest claim is the one you never have to make. While insurance is there for when things go wrong, embracing a healthier lifestyle can reduce your long-term health risks and, by extension, your reliance on medical treatment.
Many modern PMI policies actively encourage this with rewards and discounts for healthy living.
- Stay Active: The NHS recommends at least 150 minutes of moderate-intensity activity a week or 75 minutes of vigorous-intensity activity a week. This could be brisk walking, cycling, swimming, or playing a sport you enjoy. Regular exercise is proven to reduce the risk of major illnesses, such as coronary heart disease, stroke, type 2 diabetes, and cancer.
- Balanced Diet: Focus on a diet rich in fruits, vegetables, whole grains, and lean proteins. Use tools like the CalorieHero app to understand your nutritional intake and make smarter choices. A healthy diet helps maintain a healthy weight and lowers blood pressure and cholesterol.
- Prioritise Sleep: Aim for 7-9 hours of quality sleep per night. Poor sleep is linked to a host of health issues, including a weakened immune system, weight gain, and an increased risk of chronic diseases.
- Manage Stress: Chronic stress can have a significant physical impact. Incorporate stress-management techniques like mindfulness, yoga, or simply spending time in nature into your daily routine.
By taking proactive steps to manage your health, you not only improve your quality of life but also contribute to a more sustainable healthcare system and potentially lower your insurance costs over time through no-claims discounts.
Frequently Asked Questions (FAQs)
Do I have to pay the excess for every single claim I make?
What happens if my treatment costs less than my chosen excess?
Does choosing a high excess mean I am getting worse health cover?
Can I change my excess level once my policy has started?
Take Control of Your Health and Your Finances Today
Understanding your health insurance excess is the key to unlocking affordable private medical insurance in the UK. By choosing a level that balances premium savings with what you can comfortably afford to pay, you can secure first-class medical treatment and invaluable peace of mind.
Don't navigate this alone. The team of experts at WeCovr is ready to provide you with free, impartial advice. We will compare the market for you, explain your options in plain English, and build a policy that fits your life and your budget.
Get Your Free, No-Obligation PMI Quote Today and See 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.
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