TL;DR
As an FCA-authorised expert with over 900,000 policies issued, WeCovr understands the UK private medical insurance market inside out. This guide explains what happens after your first year of private health cover, detailing the renewal process, price changes, and your options to ensure you always have the best protection. Renewal terms, price changes, benefit reviews, and next steps Your first year of Private Medical Insurance (PMI) has given you peace of mind, knowing you have fast access to high-quality private healthcare.
Key takeaways
- What your renewal notice means.
- Why your premium is likely to increase.
- How to review your benefits effectively.
- Your three key options: accept, renegotiate, or switch.
- The crucial role a broker plays in securing the best deal.
As an FCA-authorised expert with over 900,000 policies issued, WeCovr understands the UK private medical insurance market inside out. This guide explains what happens after your first year of private health cover, detailing the renewal process, price changes, and your options to ensure you always have the best protection.
Renewal terms, price changes, benefit reviews, and next steps
Your first year of Private Medical Insurance (PMI) has given you peace of mind, knowing you have fast access to high-quality private healthcare. But as your first anniversary with the policy approaches, you'll enter the renewal phase. This is a critical time to reassess your cover and make sure it still fits your needs and budget.
Many people simply let their policy "auto-renew" without a second thought, often paying more than they need to for cover that might no longer be suitable. Understanding the renewal process empowers you to take control, ensuring you get the best value for your money.
This guide will walk you through:
- What your renewal notice means.
- Why your premium is likely to increase.
- How to review your benefits effectively.
- Your three key options: accept, renegotiate, or switch.
- The crucial role a broker plays in securing the best deal.
Understanding Your PMI Renewal Notice
About three to four weeks before your policy's end date, your insurer will send you a renewal pack, either by post or email. This isn't just a bill; it's a vital document detailing the terms for the upcoming year. It's essential to read it carefully.
Your renewal notice will typically include:
- The New Premium: The price for your next year of cover. This is often the first thing people look at, and it has likely increased.
- Policy Summary: A reminder of your current benefit levels, such as your hospital list, outpatient cover, and excess amount.
- Terms and Conditions Changes: Insurers occasionally update their policy wording. Your notice will highlight any significant changes, such as new exclusions or adjustments to how benefits are paid.
- Claims History: A summary of any claims you've made during the past year.
- No Claims Discount (NCD): A statement showing your current NCD level and how it has been affected by any claims. If you haven't claimed, your discount will usually increase.
Think of the renewal notice as an annual health check for your insurance policy. Don't file it away without a thorough review.
Why Do PMI Premiums Increase at Renewal?
It's the most common question policyholders ask: "I haven't even claimed, so why has my price gone up?" Unlike car insurance, where a clean record can lead to lower prices, PMI premiums are influenced by factors beyond your personal claims history.
Let's break down the four main reasons for renewal price increases.
1. Your Age
Insurers use age as a primary factor to calculate risk. As we get older, the statistical likelihood of needing medical treatment increases. Consequently, most insurers have age-banded pricing, and you will move into a new, more expensive band each year. This typically adds between 3% and 8% to your premium annually.
2. Medical Inflation
This is the silent driver of premium hikes. Medical inflation is the rising cost of providing private healthcare. It's not the same as standard inflation (CPI). It reflects the ever-increasing cost of:
- New Drugs and Treatments: Groundbreaking but expensive new therapies.
- Advanced Medical Technology: Sophisticated scanners and surgical equipment.
- Higher Hospital and Specialist Fees: The day-to-day costs of running private facilities.
Medical inflation in the UK private sector regularly runs between 8% and 12% per year, far outstripping general inflation. This cost is passed on to customers through their premiums.
3. Your Claims History (No Claims Discount)
If you made a claim during the year, it will directly impact your premium, primarily through the loss of your No Claims Discount (NCD). Most insurers operate a sliding NCD scale. If you don't claim, you move up a level and your discount increases. If you do claim, you typically move down two levels.
Here is an example of a typical NCD scale:
| Years Without a Claim | NCD Level | Discount |
|---|---|---|
| 0 (New Policy) | 0 | 0% |
| 1 | 1 | 10% |
| 2 | 2 | 20% |
| 3 | 3 | 30% |
| 4 | 4 | 40% |
| 5+ | 5 (Max) | 50% |
Making a claim would move you from Level 5 back to Level 3, significantly increasing your base premium before other factors are even considered.
4. The Insurer's Overall Performance
Insurers price their policies based on predicted claim levels across their entire pool of customers. If they experience a year where claims are higher than forecast (for example, due to a surge in a particular type of procedure), they may need to adjust premiums upwards for all policyholders to ensure they have enough funds to pay future claims.
| Factor | Typical Annual Impact on Premium | Explanation |
|---|---|---|
| Ageing | +3% to 8% | You move into a higher risk bracket each year. |
| Medical Inflation | +8% to 12% | The rising cost of private medical technology, drugs, and expertise. |
| Making a Claim | +20% to 50% | You lose some or all of your No Claims Discount. |
| IPT | 12% (fixed rate) | Insurance Premium Tax is a government levy on the premium. |
Understanding these factors shows that a price rise at renewal is normal. However, that doesn't mean you have to accept it without question.
The Critical Role of Your Underwriting Type at Renewal
Your policy's underwriting method is one of the most important, yet least understood, aspects of your cover. It dictates how pre-existing conditions are handled and has a huge bearing on your decision to switch insurers.
Moratorium (Mori) Underwriting
This is the most common type of underwriting for personal PMI policies.
- How it works: It automatically excludes treatment for any medical conditions you've had symptoms, treatment, or advice for in the 5 years before the policy started.
- The "rolling" benefit: The magic of a moratorium policy happens at renewal. If you complete two continuous years on the policy without experiencing any symptoms, treatment, or advice for that pre-existing condition, it may become eligible for cover.
Example: David had physiotherapy for shoulder pain in 2024. He takes out a moratorium policy in January 2025. His shoulder is excluded. If he has no more shoulder pain, consultations, or treatment for two full years (until January 2027), his shoulder condition could then be covered by the policy.
This is a powerful reason not to switch insurers if you are part-way through a moratorium period for a condition you want to be covered in the future.
Full Medical Underwriting (FMU)
With FMU, you complete a detailed health questionnaire when you first apply. The insurer assesses your medical history and lists specific conditions as permanent exclusions on your policy certificate.
- How it works: Exclusions are clearly defined from day one.
- At renewal: These exclusions are typically permanent. They do not "wash out" over time as they can with moratorium underwriting.
If you have an FMU policy and are in good health with no new conditions, you have more flexibility to switch insurers, as your health status is clearly documented.
Reviewing Your Policy Benefits: Is Your Cover Still Right for You?
Your life isn't static, and your health insurance shouldn't be either. Renewal is the perfect time to review your cover to ensure it aligns with your current circumstances. Don't just focus on the price; look at the value.
Ask yourself these questions:
- Has my budget changed? Can I comfortably afford the new premium, or do I need to reduce my outgoings?
- Has my family structure changed? Have you had a child, or have your children grown up and no longer need to be on your policy?
- Have I moved house? Is your chosen hospital list still convenient, or do you need to add or remove hospitals?
- Are my benefits still relevant? Did you pay for comprehensive outpatient cover but barely used it? Are you paying for mental health cover you don't foresee needing?
If your renewal premium is higher than you'd like, you have several levers you can pull to reduce it without cancelling your policy.
Levers to Adjust Your PMI Premium
| Action | Impact on Premium | What It Means For You |
|---|---|---|
| Increase Your Excess | ▼ Significant Reduction | You agree to pay a larger amount towards the first claim each year (e.g., increasing from £250 to £500). |
| Reduce Your Hospital List | ▼ Moderate Reduction | You choose a more restricted network of hospitals, forgoing premium central London or national options for a local list. |
| Lower Your Outpatient Limit | ▼ Significant Reduction | You reduce the annual financial limit for diagnostics and consultations (e.g., from 'unlimited' to £1,000). |
| Add a 6-Week Wait Option | ▼ Significant Reduction | You agree to use the NHS if it can provide the required inpatient treatment within six weeks. The PMI only pays if the NHS wait is longer. |
| Remove Optional Extras | ▼ Moderate Reduction | You remove benefits like dental, optical, or therapies cover if they are not a priority. |
An expert PMI broker can model these changes for you instantly, showing you exactly how each decision affects your premium.
Your Three Main Options at Renewal
Once you've reviewed your notice and assessed your needs, you have three clear paths forward.
1. Accept the Renewal
This is the simplest option. If you're happy with the new price and your cover, you don't need to do anything. Your cover will continue seamlessly, and your Direct Debit will be adjusted to the new amount.
When this is a good idea:
- You have recently claimed or are in the middle of treatment.
- You have developed new medical conditions since you first took out the policy. Switching would mean these new conditions would be excluded by a new insurer.
- A pre-existing condition is close to being covered under your moratorium underwriting.
2. Renegotiate with Your Current Insurer
If the price is the main issue but you're otherwise happy with your insurer, your next step should be to renegotiate. You can call the insurer directly, but you'll have more success using a broker.
When this is a good idea:
- You like your insurer's service and hospital list.
- You want to keep your current underwriting terms but need to lower the cost.
- A broker can contact the insurer's retention team on your behalf, using their market knowledge to secure a better deal or apply cost-saving measures like those listed in the table above.
3. Switch to a New Insurer
The open market can be very competitive, especially for new customers. If you are in good health and have not claimed, you may find a cheaper or better policy with a different provider.
WARNING: Switching can be risky without expert advice.
If you switch, your new policy will start from scratch. Any medical conditions, symptoms, or investigations you have had while on your old policy will now be classed as pre-existing by the new insurer and will be excluded.
This is why you should never switch without speaking to a specialist broker. They can perform a full market review and advise if switching is truly in your best interest. If it is, they can help you move on special "continuation" terms, which can protect your cover for conditions you've already had.
The Power of Using a PMI Broker at Renewal
Navigating the renewal maze alone can be confusing and time-consuming. An independent PMI broker, like WeCovr, acts as your expert advocate. Based on our high customer satisfaction ratings, our clients value the clarity and savings we provide.
Here’s why using a broker is a smart move:
- It Costs You Nothing: Brokers are paid a commission by the insurer they place business with. Their expert advice and support are completely free to you.
- Whole-of-Market Access: WeCovr can compare policies and prices from all the UK's leading private medical insurance providers, including Bupa, AXA Health, Aviva, and Vitality. This gives you a single, unbiased view of your best options.
- Expert Underwriting Knowledge: We understand the complex differences between Moratorium, FMU, and the special switching terms (like CPME) that preserve your cover. We ensure you don't lose valuable benefits when changing providers.
- Annual Review Service: We don't just find you a policy and disappear. We contact you every year before your renewal to conduct a free review, ensuring your cover remains competitive and appropriate for your needs.
Beyond the Policy: Wellness and Proactive Health
Modern private health cover is about more than just reacting to illness; it's about promoting wellness. Most top-tier insurers now include a wealth of proactive health benefits with their policies, such as:
- Discounted gym memberships.
- Digital GP services (24/7 access to a doctor via phone or app).
- Mental health support lines and therapy sessions.
- Rewards for healthy behaviour (e.g., tracking steps or workouts).
- Annual health screenings.
At WeCovr, we support our clients' health journeys further. All our PMI and life insurance clients receive complimentary access to CalorieHero, our AI-powered calorie and nutrition tracking app. We also offer discounts on other insurance products, helping you protect your family's entire financial wellbeing.
Remember, the best way to keep your long-term health insurance costs down is to stay healthy. The NHS recommends adults aim for:
- At least 150 minutes of moderate-intensity activity a week.
- A balanced diet as shown in the Eatwell Guide.
- 7 to 9 hours of quality sleep per night.
Chronic vs. Acute Conditions: A Core PMI Principle
It's vital to remember what PMI is for. UK private medical insurance is designed to cover acute conditions.
- 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, and cancer treatment.
- A chronic condition is an illness that has no known cure and requires long-term monitoring and management. Examples include diabetes, asthma, high blood pressure, and Crohn's disease.
Standard PMI policies do not cover the ongoing, routine management of chronic conditions. This care remains with the NHS. Your policy may cover an acute flare-up of a chronic condition, but not the day-to-day check-ups or medication.
Equally, pre-existing conditions you had before your policy began are not covered, at least not at first. This is why it's so important not to have a break in cover and to manage any policy switch with expert guidance.
Do I have to declare new medical conditions at renewal?
Will my premium always go up, even if I don't claim?
Can I cancel my private medical insurance policy at any time?
Your Next Step: Get an Expert Review
Your PMI renewal is an opportunity, not a problem. It's your chance to ensure you have the right cover at the best possible price. Don't just accept your insurer's first offer.
The private medical insurance UK market is complex, but with an expert on your side, it's easy to navigate. A specialist broker can save you time, hassle, and a significant amount of money.
Contact WeCovr today for a free, no-obligation review of your renewal. Let our experts compare the market for you and ensure your health and finances are protected for the year ahead.
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.
