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Cheap Private Health Insurance

How to slash the cost of getting treatment

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Tony | Edited by Gary

Updated July 2018

Private medical insurance is a luxury as the NHS provides comprehensive treatment to anyone, regardless of their ability to pay. This guide explains how it works and what to watch out for.

What is private health insurance?

Health insurance, also known as private medical insurance (PMI), covers the cost of private medical treatment for acute conditions which are likely to respond quickly to treatment – musculoskeletal problems (eg, back pain) and digestive system conditions are the most claimed-for issues.

There are lots of different plans to choose from and while basic policies cover essential treatments, more comprehensive policies may include specialist therapies and medicines such as acupuncture or chiropody. In short:

You pay a monthly sum to the insurer and it pays for your treatments incl hospital care and surgery.

I have a healthcare cash plan. Won't that do the same job?

I'm already covered under a workplace scheme. Do I need to buy cover?

What's the difference between health insurance and critical illness cover?

Private health insurance: Your nine need-to-knows

Health insurance covers the cost of private medical treatment and people who buy it typically do so because they receive faster consultations and private treatment – note that this can be in a private or NHS hospital.

Here are nine need-to-knows to help you decide if it's right for you and where to find the best cover at an affordable rate.

The NHS may be sufficient for your needs

The UK is one of a handful of countries in the world which provides people with free medical treatment at the point of delivery via a visit to a GP or A&E – so paying for private healthcare is a luxury.

Private medical insurance is a perfectly legitimate choice for those who need non-critical care and want to be seen more quickly and conveniently and in hospitals with more luxurious conditions.

Can I use private medical insurance and the NHS?

What is typically included under a private health insurance policy?

What is covered will differ from policy to policy, but there are some features commonly included:

  • Tests or surgery as an inpatient or day patient
  • Hospital accommodation and nursing care
  • Outpatient tests, consultations and therapy
  • Early stages of chronic conditions
  • Exclusive drugs
  • What is typically excluded from health insurance?

    Health insurance isn't designed to cover you for every health issue that might occur; it covers treatment for acute conditions that start after your policy began. Many chronic and pre-existing conditions (eg, arthritis or asthma) are excluded as standard and injuries suffered doing dangerous pastimes, such as skydiving, may also not be covered.

    List of common exclusions

    Any other restrictions to private health insurance?

    Self-insuring could be a better option and you'll keep the cash if you don't claim

    If you're normally healthy you might not need insurance and instead of paying £300 a year to an insurer, pay £25 a month into a high-interest savings account and if you need treatment, dip into your insurance fund. Stay fit and healthy and you get to keep your 'premiums' with interest on top.

    However, remember that treatment for some conditions, such as cancer, can cost £100,000s for private healthcare, so in some situations it could be worth paying for private health insurance, if your policy covers the illness.

    The price of private medical insurance rises annually – but you could switch and save

    Health insurance premiums aren't fixed and the price will normally rise over time, usually annually. In addition, as you get older, you're more likely to need treatment and premiums increase to reflect this.

    But be careful as most providers won't accept you if you have pre-existing conditions, so to remain covered for a condition you have, it may be better to stick with your current insurer. If you've had treatment via your policy in the last five to seven years, while your existing insurer will usually cover reoccurrences, a new one may exclude it as a pre-existing condition if it recurs within two to seven years.

    Tips to bag a cheaper premium

    Try to haggle with your provider

    Switch policy to halve price

    Show your insurer you have a healthy lifestyle to cut costs

    Some insurers will charge you less if you can prove you can stay in good health with regular exercise and healthy eating. Non-smokers will also benefit from preferential prices.

    With Aviva's Healthier Solutions, for example, you can save up to 15% if you renew and remain in shape, while VitalityHealth (previously PruHealth) offers cashback if you can show you're leading a healthy lifestyle. However, be aware that you might save more by switching provider.

    Don't just buy a policy for the perks – though they're worth a look

    There are often perks on offer such as discounted gym membership which can be a winner as not only could your monthly gym fees go down, eg, by 50% with VitalityHealth via its Active Rewards scheme, you'll also have the benefit of the health insurance policy which you pay for.

    But never choose a product based on the freebies and sweeteners – make sure you get the coverage you need for a price you can afford.

    What other perks are on offer?

    Paying an excess will lower the monthly cost – but how often do you want to pay it?

    The larger the excess, the cheaper the premium. So consider what you'd be claiming for – if it would only be in extreme circumstances, rather than every problem, look at a higher excess (if you could afford it) to cut your monthly costs.

    Once you have selected the excess, you then usually need to select the frequency of paying the excess. The options are:

    Each time you make a claim

    Only on your first claim

    You pay a percentage of the claim, but no excess

    With a pick 'n' mix policy you only pay for what you need

    Many providers sell cheap, basic plans where you can add on extras such as extra cancer care or outpatient treatment to suit your needs and budget. Decide why you need private medical insurance – to cover every eventuality or more specific medical conditions.

    You can also cut the cost by restricting when you use the policy. Several insurers will lower your premium if you choose what's called a 'six-week option'. This means if the waiting time with the NHS is six weeks or under, you'll be treated with the NHS. If it's more you'll be eligible for private healthcare.

    How to slash the cost of private health insurance

    Cheapest doesn't necessarily mean best but you can cut the cost once you've decided what you want.

    Step 1: Use comparison sites to benchmark a good price

    The easiest place to find out roughly what you can get, and whether it is affordable, is to use a comparison website. It can be a really quick and easy way to check whether the company you like is too expensive, and what is out there.

    Things to consider to cut the cost of premiums

    Is an extensive hospital list worth it?

    Is it worth having add-ons?

    Should you choose a big excess?

    The difference between 'full medical underwriting' and 'moratorium'

    Discounts for paying for a year upfront

    Quotes from at least 11 insurers

    Compare The Market

    comprethemarket
    • Wide choice of providers – at least 11
    • Boxes clearly display the cover you get
    • Option to select comprehensive, basic, mid-range or all covers

    Also quotes from at least 11 insurers

    Assured Futures*

    • Another option with a panel of at least 11 insurers
    • Clear editing options if you want to increase the excess
    • If you provide your contact details, it will contact you
    • Will charge a fee if you cancel within 12 months

    Quotes from fewer insurers but may have deals

    MoneySupermarket*

    moneysupermarket
    • Searches at least 10 insurers
    • Automatically provides basic, medium and comprehensive quotes
    • Easy option to adjust the excess
    • Bit clunky getting a quotation

    Also quotes from fewer insurers but may have deals

    Gocompare

    gocompare
    • Searches at least 10 insurers
    • Special offers displayed
    • Follow-up email also sent, from ActiveQuote (Gocompare uses this firm's tech)
    • Need PIN code – sent by email – to access quote

    Aged 50+?
    Big insurer Saga* is not on comparison sites and may not be mentioned by brokers (see below) as it usually only offers its products directly.

    Step 2: Contact a broker for more options and specialist advice

    If you're not sure which policy to get, or have conditions making it difficult to get the right policy, contact a broker for a thorough fact find. It does take a bit longer but they will be able to give you a much more bespoke quotation and clearly explain the exclusions connected to your policy.

    Is there a fee?

    Brokers get paid commission by the insurer, so if you are charged a fee (which must be disclosed upfront), do weigh up if that is the best or your only option.

    Brokers are not only useful if you want advice on what policy to pick, but they often have connections with various insurers and might be able to offer you a deal.

    How to find a broker

    Your best option to find a broker is via the Association of Medical Insurers and Intermediaries (AMII), which is a trade association for independent medical insurance advisers and has a list of members to choose from.

    Via the AMII, you can also ask an expert and find an expert to ask an adviser a question and get a free reply. This could be anything from a claims issue to a question about cover.

    If you've had a positive experience with a broker, please let us know.

    What are typical costs?

    We got quotes from the big players in the market to see which came out top. To make it fair, all quotes had a zero excess (so you pay nothing towards a claim), unlimited outpatient care and full cancer treatment coverage.

    Health insurance policies aren't easy to compare, so we're never going to be able to provide a like-for-like comparison. Some areas of coverage are standard with some providers, optional with others, while some have discount offers for the first year or perks.

    For a healthy, non-smoking 35-year-old
    Provider Cost per year

    Bupa

    £848

    VitalityHealth

    £922

    Aviva

    £974

    Axa PPP

    £1,014

    Exeter Family Friendly

    £1,092

    Correct as of July 2018.

    For a healthy, non-smoking 70-year-old
    Provider Cost per year

    Saga*

    £1,876

    Aviva

    £2,424

    Bupa

    £2,530

    VitalityHealth

    £3,063

    Axa PPP

    £3,216

    Exeter Family Friendly

    £3,336

    Correct as of July 2018.

    Q&A

    • What are the top treatments claimed for?

      How do I pay for treatment?

      Will a policy include my children and partner as well?

      Can I choose my own consultant?

      What is a chronic condition?

      What about a no-claims bonus?

    • What to do if things go wrong with your insurer

      If your health insurance company rejects your claim and you think it has done so wrongly, don't take it lying down. First complain to it directly, then if you don't get a response within eight weeks, complain to the free Financial Ombudsman.

      The ombudsman is an independent adjudicator that will make the final decision on a claim if you're at loggerheads with your insurer. For more on how to make a complaint, read our Financial Rights guide.

      Free tool if you're having a problem

      This tool helps you draft your complaint and manage it too. It's totally free, and offered by a firm called Resolver which we like so much we work with to help people get complaints justice.

      If the complaint isn't resolved, Resolver will automatically escalate it to the free Financial Ombudsman Service.

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