Zero-Excess PMI Is It Worth Paying a Higher Premium
As an FCA-authorised broker that has helped arrange over 900,000 policies, WeCovr understands the nuances of private medical insurance in the UK. Choosing the right policy involves balancing cost and coverage, and a key decision is whether to opt for a zero-excess plan, which can significantly affect your premiums.
When to choose zero-excess, impact on claims and long-term costs
Choosing a private medical insurance (PMI) policy is a significant decision. One of the most critical choices you'll make is the level of "excess" you're willing to pay. A zero-excess policy offers the ultimate peace of mind, but it comes at a higher monthly price.
This article breaks down everything you need to know about zero-excess PMI. We'll explore who it's best for, how it simplifies the claims process, and whether it makes financial sense in the long run. By the end, you'll have the clarity to decide if paying a higher premium for zero excess is the right move for your health and your wallet.
Understanding PMI Excess: The Basics Explained
Before we dive into the pros and cons of a zero-excess policy, it’s essential to understand what an excess is.
Think of it like the excess on your car or home insurance. An excess is a fixed amount of money you agree to pay towards the cost of your treatment when you make a claim. The insurer then pays the remaining balance, up to your policy limits.
For example, if you have a policy with a £250 excess and your eligible treatment costs £3,000, you would pay the first £250, and your insurer would cover the remaining £2,750.
A zero-excess policy is exactly what it sounds like: you pay nothing towards your eligible treatment costs. Your insurer covers 100% of the bill from the very first pound.
Types of Excess in the UK PMI Market
Insurers in the UK typically structure their excess in one of two ways. It's vital to know which one your policy uses.
| Excess Type | How It Works | Good For... |
|---|---|---|
| Per Claim / Per Condition | You pay the excess for each separate medical claim you make. If you need treatment for a knee injury and later for cataracts in the same year, you would pay the excess twice. | People who expect to make infrequent claims. |
| Per Policy Year | You pay the excess only once per policy year, regardless of how many claims you make for different conditions. Once you've paid it, all subsequent eligible claims in that year are covered in full. | People who might need to claim for multiple, unrelated conditions in a single year. |
A zero-excess policy simplifies this entirely. Whether it's per claim or per year, your contribution is always £0.
The Core Trade-Off: Zero-Excess vs. Higher Premiums
The fundamental principle of insurance is risk. By choosing a higher excess, you are agreeing to share more of the financial risk with the insurer. In return, they reward you with a lower monthly or annual premium. Conversely, with a zero-excess policy, the insurer takes on 100% of the financial risk for eligible claims, and they charge a higher premium for this comprehensive protection.
The difference in cost can be substantial. Let's look at a hypothetical example for a 40-year-old non-smoker seeking comprehensive private health cover in the UK.
Hypothetical Monthly Premiums by Excess Level
| Excess Level | Estimated Monthly Premium | Annual Premium | Potential Saving vs. £0 Excess |
|---|---|---|---|
| £0 (Zero-Excess) | £85 | £1,020 | £0 |
| £100 | £80 | £960 | £60 per year |
| £250 | £72 | £864 | £156 per year |
| £500 | £60 | £720 | £300 per year |
These figures are for illustrative purposes only. Your actual quote will depend on your age, location, lifestyle, and chosen level of cover.
As the table shows, opting for a £500 excess could save you £300 a year on premiums compared to a zero-excess policy. The question is: is that saving worth the risk of having to find £500 if you need to make a claim?
When is a Zero-Excess PMI Policy the Right Choice?
A zero-excess policy isn't for everyone, but for certain individuals and families, the higher premium is a price worth paying for complete financial security and simplicity. Here are some scenarios where it makes the most sense.
1. You Prioritise Absolute Budget Certainty
If you are someone who meticulously plans your finances and dislikes unexpected expenses, a zero-excess policy is ideal. Your premium is a fixed, predictable outgoing. You know that if you fall ill and need eligible treatment, there will be no surprise bills from the hospital. This peace of mind is often the primary reason people choose this option.
2. You Have Limited Disposable Savings
While a £250 or £500 excess might sound manageable, finding that sum at short notice can be a real struggle for many households. If an unexpected bill of that size would cause you significant financial stress or force you to dip into long-term savings, paying a slightly higher monthly premium for a zero-excess plan acts as a valuable safety net.
3. You Anticipate a Higher Likelihood of Needing to Claim
If you lead a very active lifestyle, play contact sports, or have a family history that suggests a predisposition to certain acute conditions (that are not pre-existing for you), you might reasonably expect to use your policy more often. In this case, the breakeven point between a higher premium and paying multiple excesses could tip in favour of a zero-excess plan.
4. You Want the Simplest Claims Experience Possible
Making an insurance claim can feel stressful, especially when you're unwell. A zero-excess policy offers the most straightforward and seamless claims journey.
- With an excess: You get a GP referral, the insurer approves the claim, you receive treatment, and then you have to deal with an invoice from the hospital for your excess.
- With zero excess: You get a GP referral, the insurer approves the claim, you receive treatment, and that's it. The insurer settles the bill directly with the hospital in full. There's no financial admin for you to worry about.
An expert PMI broker like WeCovr can help you analyse your personal circumstances and risk profile to determine if the benefits of a zero-excess policy align with your needs.
Analysing the Long-Term Costs: A Numbers-Based Approach
Is a zero-excess policy a good financial decision over the long term? The answer depends entirely on how often you claim. Let's run the numbers over a five-year period using our hypothetical premiums.
- Policy A (Zero-Excess): £85/month premium.
- Policy B (£500 Excess, per claim): £60/month premium.
5-Year Cost Comparison
| Number of Claims in 5 Years | Total Cost for Policy A (Zero-Excess) | Total Cost for Policy B (£500 Excess) | Which Policy Was Cheaper? |
|---|---|---|---|
| 0 Claims | £5,100 (premiums only) | £3,600 (premiums only) | Policy B by £1,500 |
| 1 Claim | £5,100 (premiums only) | £4,100 (£3,600 + £500) | Policy B by £1,000 |
| 2 Claims | £5,100 (premiums only) | £4,600 (£3,600 + £1,000) | Policy B by £500 |
| 3 Claims | £5,100 (premiums only) | £5,100 (£3,600 + £1,500) | Costs are Identical |
| 4 Claims | £5,100 (premiums only) | £5,600 (£3,600 + £2,000) | Policy A by £500 |
The Verdict:
In this scenario, you would need to make more than three separate claims in five years for the zero-excess policy to become the cheaper option financially. This is the gamble you take. You are paying a premium for certainty, effectively insuring yourself against the risk of needing frequent treatment.
A Critical Reminder: What UK PMI Does and Does Not Cover
It is impossible to overstate this point: standard UK private medical insurance is designed to cover acute conditions that arise after you take out your policy.
Pre-existing and Chronic Conditions are Excluded
- Chronic Conditions: These are illnesses that are long-lasting, have no known cure, and are managed with medication or monitoring. Examples include diabetes, asthma, high blood pressure, and Crohn's disease. PMI will not cover the ongoing management of these conditions.
- Pre-existing Conditions: This refers to any disease, illness, or injury for which you have experienced symptoms, received medication, advice, or treatment before your policy start date. These are typically excluded, often for the first two years (moratorium underwriting) or permanently (full medical underwriting).
PMI provides access to high-quality, prompt treatment for acute conditions—illnesses that are curable and short-lived, such as joint replacements, cataract removal, hernia repair, and crucially, cancer treatment. The value of PMI lies in bypassing long waiting lists for these specific, treatable problems. With NHS waiting lists in England remaining over 7.5 million in 2024, this benefit is more valuable than ever.
Beyond the Excess: Other Key Factors Affecting Your Premium
The excess level is just one piece of the puzzle. When building your private health cover policy, several other elements will heavily influence your final premium.
-
Your Age and Location: Age is the single most significant factor. Premiums rise as you get older. Where you live also matters, with policies in central London and the South East being the most expensive due to higher hospital costs.
-
Level of Cover: You can customise your policy to fit your budget.
- In-patient vs. Out-patient: A basic policy might only cover treatment where you need a hospital bed overnight (in-patient). A comprehensive policy will also cover specialist consultations, diagnostic scans (like MRI and CT), and tests that don't require a hospital stay (out-patient).
- Therapies: You can choose to add cover for services like physiotherapy, osteopathy, and chiropractic treatment.
- Mental Health Cover: This is often an add-on, providing access to psychiatrists and therapists.
-
Hospital List: Insurers offer different tiers of hospitals. A policy with a limited list of local hospitals will be cheaper than one that gives you access to every private hospital in the country, including the premier facilities in London.
-
No Claims Discount (NCD): Similar to car insurance, most PMI providers offer a No Claims Discount. For every year you don't claim, your discount increases, reducing your premium at renewal. Making a claim, even if your excess covers the full cost, will typically reduce your NCD, leading to a higher premium the following year.
The WeCovr Advantage: Expert Guidance and Added Value
Navigating these options can be complex. This is where an independent, FCA-authorised broker like WeCovr provides immense value. Instead of going to insurers directly, our experts can:
- Compare the Market: We search policies from a wide panel of the best PMI providers in the UK to find the perfect fit for your needs and budget.
- Offer Impartial Advice: We work for you, not the insurer. We can explain the pros and cons of a zero-excess policy versus a higher excess, and help you understand the long-term cost implications.
- Unlock Extra Benefits: When you arrange your health insurance through us, you get complimentary access to CalorieHero, our AI-powered calorie and nutrition tracking app. Furthermore, our clients often receive discounts on other insurance products, such as life or income protection insurance. Our high customer satisfaction ratings reflect our commitment to finding the best outcomes for our clients.
Health & Wellness: A Proactive Approach to Wellbeing
While insurance is a crucial safety net, the best way to manage health costs is to invest in your own wellbeing. Taking proactive steps can reduce your risk of developing certain acute conditions.
- Stay Active: The NHS recommends at least 150 minutes of moderate-intensity activity or 75 minutes of vigorous-intensity activity a week. Data from Sport England's 2022-23 survey shows that only 63% of adults in England meet this guideline. A brisk walk, a cycle ride, or a swim can make a huge difference.
- Nourish Your Body: Following the principles of the NHS Eatwell Guide, which emphasises a balanced intake of fruits, vegetables, lean proteins, and whole grains, can help maintain a healthy weight and reduce the risk of numerous health problems.
- Prioritise Sleep: Most adults need 7-9 hours of quality sleep per night. Poor sleep is linked to a weakened immune system and a higher risk of developing health issues.
- Manage Stress: Chronic stress can have a physical impact on your body. Techniques like mindfulness, meditation, yoga, or simply spending time in nature can help manage stress levels effectively.
Final Verdict: Is Zero-Excess PMI Worth It?
A zero-excess private medical insurance policy is worth the higher premium if you value absolute financial certainty and simplicity above all else.
Choose a zero-excess policy if:
- You want to eliminate the risk of any unexpected medical bills.
- You would struggle to pay an excess of £250-£500 at short notice.
- You want the most seamless and stress-free claims process possible.
Consider a policy with an excess if:
- You are comfortable with a degree of financial risk to achieve lower monthly premiums.
- You have savings you can use to cover an excess if needed.
- You are in good health and believe you are unlikely to make frequent claims.
Ultimately, the right choice is a personal one. It requires a careful assessment of your financial situation, your attitude to risk, and your healthcare priorities.
Ready to explore your options? The expert team at WeCovr is here to provide a free, no-obligation comparison of private medical insurance UK policies. Let us help you find the perfect balance of cover, cost, and excess for your peace of mind. Get your personalised quote today.
What happens if my treatment cost is less than my PMI excess?
Can I change my excess level during my policy term?
Does a zero-excess policy mean every single medical cost is covered?
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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