TL;DR
As an FCA-authorised broker that has helped arrange over 900,000 policies, WeCovr demystifies the world of private medical insurance for UK consumers. One of the most critical, and often misunderstood, components of any policy is the 'excess'. This guide will equip you with the knowledge to make an informed decision.
Key takeaways
- A higher excess generally leads to a lower monthly premium.
- A lower excess generally leads to a higher monthly premium.
- Policy Details: David has a policy with a £250 per claim excess.
- Claim 1 (Knee Injury): In March, David injures his knee playing football. His treatment, including consultations and physiotherapy, costs £2,000. David pays the first £250, and his insurer covers the remaining £1,750.
- Claim 2 (Gallbladder Surgery): In September, David develops gallstones and requires surgery. The total cost is £5,500. Because this is a new, unrelated condition, he must pay his excess again. David pays another £250, and his insurer covers the remaining £5,250.
As an FCA-authorised broker that has helped arrange over 900,000 policies, WeCovr demystifies the world of private medical insurance for UK consumers. One of the most critical, and often misunderstood, components of any policy is the 'excess'. This guide will equip you with the knowledge to make an informed decision.
WeCovr's guide to choosing the right excess level for your health insurance policy
Choosing a private health cover policy can feel overwhelming. With so many providers, cover levels, and options, it's easy to get lost in the details. However, one of the most powerful tools you have for controlling the cost and function of your policy is the excess.
Getting the excess level right is the key to unlocking affordable private medical insurance that works for you. In this comprehensive guide, we'll break down everything you need to know, from the basic definition to the strategic thinking required to select the perfect level for your circumstances.
What Exactly is a Health Insurance Excess?
In the simplest terms, a health insurance excess is a fixed amount of money you agree to pay towards the cost of your medical treatment when you make a claim. Your insurer then pays the remaining balance, up to the limits of your policy.
Think of it like the excess on your car or home insurance. It's your contribution to the claim, and it’s a fundamental feature of almost every private medical insurance policy in the UK.
The core principle is straightforward:
- A higher excess generally leads to a lower monthly premium.
- A lower excess generally leads to a higher monthly premium.
By agreeing to pay more towards a potential claim, you reduce the insurer's financial risk, and they pass this saving on to you in the form of cheaper premiums.
| Excess Level | Your Contribution per Claim/Year | Impact on Monthly Premium |
|---|---|---|
| Low (£0 - £100) | You pay little or nothing | Highest |
| Medium (£250 - £500) | You pay a moderate amount | Medium |
| High (£1,000+) | You pay a significant amount | Lowest |
How Does a Health Insurance Excess Work in Practice?
Understanding the theory is one thing, but seeing how an excess works with real-world examples makes it much clearer. The first thing to know is that there are two primary ways an excess can be applied.
1. Excess Applied 'Per Claim' or 'Per Condition'
This is a very common structure. With this type of excess, you pay the agreed amount for each separate medical condition you claim for within a policy year.
Real-Life Example:
- Policy Details: David has a policy with a £250 per claim excess.
- Claim 1 (Knee Injury): In March, David injures his knee playing football. His treatment, including consultations and physiotherapy, costs £2,000. David pays the first £250, and his insurer covers the remaining £1,750.
- Claim 2 (Gallbladder Surgery): In September, David develops gallstones and requires surgery. The total cost is £5,500. Because this is a new, unrelated condition, he must pay his excess again. David pays another £250, and his insurer covers the remaining £5,250.
- Total Paid by David: £500 (£250 + £250).
If David needed further treatment for his knee within the same policy year, he would not have to pay the excess again for that specific condition.
2. Excess Applied 'Per Policy Year'
This type of excess is often simpler to manage. You pay the agreed amount only once during your policy year, regardless of how many claims you make for different conditions.
Real-Life Example:
- Policy Details: Maria has a policy with a £500 per policy year excess.
- Claim 1 (Dermatology): In June, Maria sees a dermatologist for a skin condition. The consultation and tests cost £600. Maria pays the first £500 of the bill, and her insurer pays the remaining £100. Her annual excess is now fully paid.
- Claim 2 (ENT Specialist): In November, she needs to see an Ear, Nose, and Throat (ENT) specialist for a separate issue. The treatment costs £1,500. Because she has already paid her annual excess, she pays £0 towards this claim. Her insurer covers the full £1,500.
- Total Paid by Maria: £500.
Comparing the Two Excess Types
| Feature | Per Claim / Per Condition Excess | Per Policy Year Excess |
|---|---|---|
| Payment Trigger | Paid for each new, unrelated claim. | Paid only once per policy year. |
| Best For | Individuals who anticipate making infrequent claims. | Individuals who might make multiple, unrelated claims in a year. |
| Cost Predictability | Less predictable. Your total outlay depends on how many separate health issues you have. | Highly predictable. You know your maximum out-of-pocket cost is the excess amount. |
| Premium Impact | Often results in a slightly lower premium than the 'per year' equivalent. | Can sometimes be slightly more expensive for the same excess amount. |
The Critical Link Between Excess and Your Monthly Premium
The excess you choose is one of the biggest levers you can pull to adjust the price of your private health cover. Insurers use the excess to manage their own risk and costs in two ways:
- Shared Financial Responsibility: When you share in the cost, the insurer's potential payout is lower.
- Deterring Minor Claims: A £250 excess means you are unlikely to claim for a £150 consultation, as you would be paying the full amount yourself. This reduces the administrative burden and cost of processing small claims for the insurer.
To illustrate the powerful effect of the excess, let's look at an example premium for a healthy, 40-year-old non-smoker seeking comprehensive cover.
Illustrative Monthly Premiums by Excess Level (Example Only)
| Excess Level | Example Monthly Premium | Potential Annual Saving (vs. £0 Excess) |
|---|---|---|
| £0 | £95 | £0 |
| £100 | £88 | £84 |
| £250 | £75 | £240 |
| £500 | £62 | £396 |
| £1,000 | £50 | £540 |
Disclaimer: These figures are for illustrative purposes only and do not constitute a quote. Actual premiums vary based on age, location, health, cover level, and insurer.
As you can see, increasing your excess from £0 to £500 could save you nearly £400 a year on premiums. Opting for a £1,000 excess could more than halve that saving. This is why choosing an excess isn't just a minor detail—it's a core financial decision.
Choosing the Right Excess Level for You: A Step-by-Step Guide
There is no single "best" excess. The right choice is deeply personal and depends on your financial situation, your attitude to risk, and your health. Follow these steps to find your ideal level.
Step 1: Honestly Assess Your Finances
This is the most important step. Your excess must be an amount you could comfortably pay tomorrow without causing financial distress.
- Check Your Savings: Do you have an emergency fund? Could it cover your chosen excess without issue? A £1,000 excess is only a good idea if you have at least £1,000 readily available.
- Consider Your Budget: A lower monthly premium is attractive, but if you can't afford the lump sum when you need to claim, the insurance becomes ineffective. Be realistic about what you could pay out-of-pocket.
Step 2: Consider Your Health and Attitude to Risk
Your personal health profile and how you feel about risk should guide your decision.
- Young and Healthy: If you are in good health and primarily want insurance for unexpected, serious issues, a higher excess (£500 or £1,000) can be a very cost-effective strategy. You benefit from low premiums while being protected against major costs.
- Family History or Health Concerns: If you have a family history of certain conditions or simply prefer to minimise potential costs, a lower excess (£100 or £250) might provide better peace of mind, even if the premium is higher.
- Peace of Mind vs. Cost-Saving: Are you someone who wants to know that if you get ill, your costs will be minimal? Or are you a savvy saver who is happy to self-insure for smaller amounts to get a cheaper premium?
Step 3: Understand What Your Policy Covers (and What It Doesn't)
This is a critical point that all UK private medical insurance customers must understand.
Important: Standard private medical insurance in the UK is designed to cover the diagnosis and treatment of acute conditions that arise after your policy has started. An acute condition is one that is curable and short-term, like a cataract, a hernia, or a joint injury.
It does not cover pre-existing conditions (illnesses or injuries you had before you took out the policy) or chronic conditions (long-term, incurable illnesses like diabetes, asthma, or high blood pressure). These will continue to be managed by the NHS.
Knowing this helps you frame the purpose of your excess. You are choosing what you're prepared to pay towards the cost of an eligible, new, acute condition.
Step 4: Think About Your Likely Claim Frequency
Reflect on whether you'd prefer a 'per claim' or 'per year' excess.
- If you think you're unlikely to need treatment more than once a year, a 'per claim' excess could be cheaper.
- If you're concerned about having a run of bad luck with several unrelated health problems, the certainty of a 'per policy year' excess might be more appealing.
Common Excess Levels in the UK: A Comparison
Let's dive into the common excess tiers offered by the best PMI providers and who they are best suited for.
| Excess Level | Who It's Best For | Impact on Premium | Pros | Cons |
|---|---|---|---|---|
| £0 | Those who want maximum peace of mind and no out-of-pocket costs at the point of claim. | Highest | Complete financial certainty. No barriers to making a claim. | Significantly increases the cost of your policy. |
| £100 - £250 | The "balanced choice". A good option for most people, offering a noticeable premium saving without a prohibitive upfront cost. | High / Medium | Keeps premiums manageable. The excess is affordable for most people from savings. | Still results in a relatively high premium compared to other options. |
| £500 | Savvy consumers and healthy individuals who want significant premium savings and are comfortable covering a moderate cost. | Medium / Low | A great balance of low premiums and a manageable excess for a serious claim. | May deter you from claiming for smaller diagnostic tests or consultations. |
| £1,000 | Those prioritising the lowest possible premium, often younger people or those with substantial savings. | Low | Drastically reduces your monthly premium, making comprehensive cover much more affordable. | A significant out-of-pocket cost. Can be a barrier to seeking treatment if finances are tight. |
| £3,000+ | High-net-worth individuals or those who only want cover for catastrophic health events, effectively self-insuring for anything less. | Lowest | The absolute minimum premium. Acts as a 'disaster-only' policy. | The policy will only kick in for very expensive procedures. Not suitable for most people. |
A Note on NHS Waiting Lists and the Value of PMI
A primary driver for the growing interest in private medical insurance in the UK is the pressure on the National Health Service. According to NHS England data, the referral-to-treatment (RTT) waiting list has been a significant concern for several years. As of early 2025, the number of people waiting for routine hospital treatment in England remains in the millions, with many waiting over 18 weeks and, in some cases, over a year for procedures.
Private health cover offers a way to bypass these queues for eligible acute conditions, giving you faster access to specialists, diagnosis, and treatment. Your excess is the price of activating that fast-track access. By choosing a £250 or £500 excess, you are essentially saying, "I am willing to pay this amount to get my knee surgery next month instead of waiting 10 months on the NHS."
Beyond the Excess: Other Ways to Manage Your PMI Costs
The excess is just one tool. A good PMI broker, like WeCovr, will help you explore other options to tailor a policy to your budget.
- The 6-Week Option: This is a popular way to reduce premiums. Your policy will only cover inpatient treatment if the NHS waiting list for that treatment is longer than six weeks. If the NHS can treat you sooner, you use the NHS. This provides a fantastic safety net at a lower cost.
- Guided Hospital & Consultant Lists: Insurers offer tiered hospital lists. Agreeing to use a more limited network of approved hospitals and specialists can result in significant savings.
- No-Claims Discount (NCD): Similar to car insurance, most PMI policies include an NCD. For every year you don't make a claim, your premium at renewal is discounted, often by a significant percentage.
- Proactive Health & Wellness: A healthy lifestyle reduces your risk of needing to claim. At WeCovr, we support our clients' wellbeing journey by providing complimentary access to our AI-powered calorie and nutrition tracking app, CalorieHero. Managing your diet, sleep, and activity levels is the best long-term health insurance of all. Furthermore, clients who purchase PMI or Life Insurance through WeCovr can often benefit from discounts on other insurance products.
How WeCovr Can Help You Find the Perfect Balance
Navigating the complexities of excess levels, hospital lists, and underwriting options can be challenging. This is where WeCovr provides invaluable, independent expertise.
As an FCA-authorised broker, our primary duty is to you, the client. Our service is provided at no cost to you. We take the time to understand your unique needs, your budget, and your health priorities.
We then compare policies and options from the UK's leading private medical insurance providers, including Bupa, AXA Health, Aviva, and Vitality. We do the hard work of finding the optimal balance between a premium you can afford and an excess that gives you confidence. Our high customer satisfaction ratings are a testament to our client-focused approach. We don't just sell you a policy; we find you the right health partner.
Can I change my health insurance excess level?
What happens if I make a claim but can't afford to pay the excess?
Does my excess apply to both inpatient and outpatient treatment?
Is a £0 excess policy worth the high premium?
Ready to find the private health cover that's right for you?
Contact WeCovr today for a free, no-obligation quote and let our expert advisors guide you to the perfect policy for your needs and budget.
