What is private health insurance?

Private health insurance is a policy that covers the cost of private medical treatment for acute conditions. It gives you faster access to specialists, diagnostic tests, and surgery without relying on NHS waiting lists.

How much does private health insurance cost in the UK?

Premiums typically range from £50 to £150 per month for an individual, depending on your age, medical history, level of cover, and chosen excess. Family policies cost more but often offer better value than insuring each person separately.

Does private health insurance cover pre-existing conditions?

Most standard policies do not cover pre-existing conditions. Some providers offer moratorium-based underwriting where pre-existing conditions may become covered after a period without symptoms or treatment, typically two years.

Can I use private health insurance alongside the NHS?

Yes. Many policyholders use the NHS for routine care and their private cover for specialist referrals, elective surgery, or when NHS waiting times are long. Some policies include a six-week NHS wait option to reduce premiums.

What is the difference between an excess and a co-payment?

An excess is a fixed amount you pay towards each claim or policy year before your insurer pays. A co-payment means you pay a percentage of every claim. Both reduce your premium but increase your out-of-pocket costs when you claim.

How do I compare private health insurance plans effectively?

Compare policies based on the level of cover, the hospital and consultant network, exclusions, excess amounts, and annual claim limits. Getting quotes from multiple providers ensures you find the best value for your needs.

What is the difference between per-year and per-claim excess?

Per-year excess means you pay the amount once in a policy year, then all further claims are fully covered. Per-claim excess means you pay the amount each time you claim for a new condition. Per-year is better if you expect multiple claims; per-claim typically has lower premiums.

Is a higher excess worth it on health insurance?

It depends on how often you claim. A £250 excess saves 15–25% on premiums. If you claim less than once per year on average, a higher excess saves money overall. If you claim frequently, a lower excess or £0 excess may be more cost-effective despite the higher monthly premium.

What is a co-payment on health insurance?

A co-payment (or co-share) means you pay a fixed percentage of every claim, typically 25%. Unlike a fixed excess, your out-of-pocket cost scales with the treatment cost. A fixed excess is usually preferable because your maximum out-of-pocket cost is known and capped.

Private Health Insurance Excess Explained | How It Affects Your Premium

What Is an Excess on Health Insurance?

An excess is the amount you agree to pay towards your medical costs before your insurer starts paying. It works the same way as a car insurance excess — you absorb the first portion of the cost, and the insurer covers the rest.

Choosing a higher excess reduces your monthly premium because you are taking on more of the financial risk yourself. The trade-off is that you pay more out of pocket when you actually need treatment.

Types of Excess

Not all health insurance excesses work the same way. Understanding the type is crucial when comparing policies:

Per Policy Year Excess

You pay the excess amount once per year, regardless of how many claims you make. After paying the excess on your first claim of the year, all subsequent claims in that policy year are covered in full.

Example: You have a £250 per-year excess. Your first claim costs £800 — you pay £250, the insurer pays £550. Your second claim costs £1,200 — the insurer pays the full £1,200 because you have already met your annual excess.

Best for: People who expect to make multiple claims in a year. More predictable total out-of-pocket costs.

Per Claim / Per Condition Excess

You pay the excess amount each time you claim for a new condition or treatment. If you make three separate claims in a year, you pay the excess three times.

Example: You have a £250 per-claim excess. You claim for a knee consultation (£500 — you pay £250, insurer pays £250) and later for a separate back condition (£400 — you pay £250, insurer pays £150). Total out-of-pocket: £500.

Best for: Policies with lower premiums. Works well if you expect to claim rarely.

Which Providers Use Which Type?

Provider	Excess Type	Options Available
Bupa	Per year or per claim (varies by plan)	£0, £100, £250, £500, £1,000
AXA Health	Per year	£0, £100, £250, £500
Vitality	Per year	£0, £100, £250, £500, £1,000
Aviva	Per year	£0, £100, £250, £500, £1,000, £2,000, £5,000
WPA	Per year	£0, £100, £250, £500, £1,000
The Exeter	Per claim	£0, £100, £250, £500, £1,000
General & Medical	Per year	£0, £100, £250, £500

How Excess Affects Your Premium

The relationship between excess and premium is not linear — the biggest savings come from moving off £0 excess. Here are typical premium reductions:

Excess Amount	Typical Premium Saving	Annual Premium Saved (on £80/mo policy)
£0	Baseline	—
£100	5–10%	£48–£96
£250	15–25%	£144–£240
£500	25–35%	£240–£336
£1,000	30–40%	£288–£384

Choosing the Right Excess

The optimal excess depends on your financial situation and how often you expect to claim:

Choose £0 Excess If:

You expect to claim frequently (ongoing conditions, regular specialist visits)
You want zero financial surprise when you need treatment
Budget for claims is a concern — you prefer higher monthly payments for certainty

Choose £100–£250 Excess If:

You claim occasionally (once or twice a year)
You want a meaningful premium reduction while keeping out-of-pocket costs manageable
This is the sweet spot for most people — a £250 excess provides a 15–25% saving while being affordable if you do need treatment

Choose £500+ Excess If:

You rarely claim and mainly want insurance as a safety net for expensive treatment
You have savings to cover the excess comfortably
You want the lowest possible monthly premium
You are young and healthy with low expected claims

Excess vs Co-Payment

Some policies offer a co-payment (also called co-share) option instead of or alongside an excess. A co-payment means you pay a fixed percentage of every claim — typically 25%. This is different from an excess where you pay a fixed amount.

Excess example: £250 excess on a £2,000 claim = you pay £250, insurer pays £1,750.

Co-payment example: 25% co-payment on a £2,000 claim = you pay £500, insurer pays £1,500.

Co-payments can be riskier because your out-of-pocket cost scales with the treatment cost. A £20,000 cancer treatment with 25% co-payment means you pay £5,000. With a £250 excess, you would pay only £250 regardless of the treatment cost.

Our recommendation: For most people, a fixed excess is preferable to a co-payment because your maximum out-of-pocket cost is known and capped.

The Break-Even Calculation

You can calculate whether a higher excess saves you money overall:

Annual premium saving ÷ additional excess risk = number of claim-free years to break even.

Example: Moving from £0 to £250 excess saves £192/year on a £80/month policy. If you claim once every two years, your break-even is: £192 × 2 = £384 saved over two years, minus £250 excess paid = £134 net saving. If you claim every year, you save £192 minus £250 = net loss of £58. So a £250 excess makes financial sense if you claim less than once per year on average.

Private Health Insurance Excess Explained