What Is A Health Insurance Excess And How Does It Work?
Written By: Stuart Hendy
What is a health insurance excess and how does it work?
You’re thinking about getting private health insurance, but have you heard about the term “excess”? It sounds a bit daunting, but don’t worry! We are here to break it down for you in an easy way. Let’s break it down!
Get Tailored Health Insurance Quotes from Top UK Insurers
What is excess on health insurance?
Think of health insurance excess as a bit like a ticket to a concert. When you buy a ticket, you know there’s a cost upfront. Similarly, when you make a claim on your health insurance, there’s an amount you’ve agreed to pay first—this is your excess. The cool part? You only need to pay this once a year, no matter how many times you claim.
For instance, if you choose a yearly excess of £250 and end up needing treatment that costs £5,000, you will need to pay £250, and your insurance provider will take care of the rest. If you need more treatment later on, you won’t have to pay that excess again—your insurer’s got your back!
Why would you choose to pay an excess?
Now, you might wonder why anyone would want to choose a higher excess. Well, opting for a higher excess usually means lower monthly payments. But make sure it’s an amount you can easily part with if you need to make a claim. Insurers usually offer a range of excess amounts, from £0 all the way up to £5,000. Keep an eye out though—each insurer has different options. For example, Bupa’s excess options are £0, £100, £150, £200, £250, £500, £750, £1,000, £2,000, £3,000, and £5,000 per policy year. AXA health insurance excess doesn’t include a £150 option. Always check your policy documents carefully, especially if you are switching providers, to understand what options are available.
How often do I need to pay for health insurance excess?
With most UK health insurers, the excess is typically paid once a year per policyholder, regardless of the number of claims. This arrangement is often recommended by our specialists as it balances affordability with convenience.
However, some insurers, like Vitality Health, offer the option to pay an excess for each claim. Choosing this option can significantly lower your monthly premiums but may become costly if you need to make multiple claims in a year.
For example, if your policy excess is £250 per claim and you make five claims in a year, you’d pay a total of £1,250 in excess fees, on top of your monthly premiums. While the reduced premium might initially seem attractive, the combined costs of frequent claims and monthly payments can add up quickly, potentially outweighing the savings.
When deciding on an excess structure, it’s crucial to consider your health needs and the likelihood of multiple claims. If you anticipate frequent claims, a per-claim excess could lead to higher overall expenses. Always weigh the benefits of lower premiums against the potential out-of-pocket costs in a busy claims year.
Can I change health insurance excess once I’ve signed up for the policy?
Once you take out a health insurance policy, you typically have a cooling-off period to make changes. This period lasts 14 days for most insurers, while Bupa offers 21 days.
After the cooling-off period, you can only adjust your excess during the renewal period. This usually begins four weeks before your renewal date, when your renewal details are issued. Also, you can make changes during the 14-day cooling-off period after your renewal date.
It’s important to keep these timelines in mind if you’re considering adding or removing your policy excess.
When and how do I need to pay an excess on health insurance?
When you make an eligible claim for treatment, your insurer will ask you to pay the agreed excess. This is typically done at the time of authorisation, often over the phone or through the insurer’s app. Once you pay the excess, your insurer takes care of the remaining costs directly with your healthcare provider, hospital, or consultant.
Example 1
Let’s say you are experiencing cancer symptoms, and your doctor recommends seeing a specialist for further tests, an MRI, or a biopsy:
- Excess: £250
- Consultant Appointment: £200
- Tests and Biopsy: £850
- MRI: £550
- Total Cost: £1,600
You’ll pay the £250 excess upfront, and your insurer will settle the remaining £1,350 directly with the healthcare providers.
Example 2
When Treatment Costs Less Than Your Excess
- Excess: £250
- Treatment Cost: £150
You’ll pay the full £150. For your next claim, you’ll only pay the remaining £100 of your excess, and your insurer will handle the rest.
Example 3
When Treatment Equals Your Excess
- Excess: £1,000
- Treatment Cost: £1,000
You’ll pay the full £1,000. However, for the rest of the policy year, you won’t need to pay any further excess for subsequent claims.
Additional Benefits
For some benefits, like dental and optical care, physiotherapy, acupuncture or worldwide travel cover, you might not need to pay an excess. However, this depends on your specific policy and insurer. Always check your policy details to understand the terms and conditions related to your benefits.
Benefits of Private Medical Insurance
Core Cover:
Optional Add-Ons:
For more information or to customise your plan, contact us today!
When will I not have to pay an excess?
When you have health insurance, there are times when you won’t have to fork out an excess fee. A lot of policies are set up to give you extra help during certain health situations. Here are some key examples where insurers usually waive the excess:
1. NHS Cancer Cash Benefit
If you’re undergoing cancer treatments like chemotherapy or radiotherapy at an NHS facility as either an in-patient or out-patient, many insurers will provide additional financial support often referred to as the NHS Cancer Cash Benefit. This usually means you’ll receive a small daily payment to ease the strain during your recovery.
For example, you might get something like £100 each day throughout your treatment journey. You can use this money however you see fit—whether it’s for travel costs, meals, or just taking a bit of pressure off your finances while focusing on getting better. And just like with the NHS in-patient benefit, there’s no excess attached to this payment—you get the help without having to worry about immediate costs.
2. NHS In-Patient Treatment
If you decide to go for in-patient care through the NHS rather than private healthcare, many insurers—like AXA, Bupa, and Aviva—will offer a little cash incentive. This typically means you could get around £100 or even £150 per night that you’re in the hospital, depending on your policy, with payments lasting for a certain number of nights. This benefit is basically their way of saying “thanks” for choosing the NHS while also helping cover some costs related to your hospital stay. The great part? There’s no excess charge for this benefit, so you can access it without any deductions.
3. Extra cashback
Since losing hair can be a side effect of cancer treatments—leading to tough emotions not only for individuals but also their families—some health insurers will cover a new wig if yours has fallen out or been discarded due to therapy needs. Depending on your specific policy, how much they cover can vary; however, the best part is that there’s no deductible involved: it won’t cost you anything out-of-pocket. It might seem like a small thing but can mean a lot when it comes to maintaining dignity and confidence during challenging times.
Which excess amount is right for me?
Choosing the right excess depends on several factors, such as your age, activity level, overall health, and the likelihood of needing to make a claim.
- If you’re healthy and unlikely to make a claim, you might be comfortable with a higher excess, as it can lower your monthly premiums.
- If you’re active, particularly if you play sports or regularly go to the gym, your chances of injury and needing to make a claim may be higher. In this case, you might want to balance the excess amount to suit your lifestyle.
- For older individuals, a higher excess could be a good option. Premiums tend to increase with age, and opting for a higher excess can help reduce these costs. If you need major surgeries, like a hip replacement or heart bypass (which can cost over £15,000), having a high excess might be more cost-effective than relying on NHS treatment, especially since the current NHS waiting time for a hip replacement is around four years.
Regardless of your situation, it’s important to choose an excess that feels comfortable and can be paid for quickly in case of an emergency. For the best advice on your health insurance excess, speak with one of our specialists at PremierPMI, who will guide you through choosing the right excess for your health insurance policy.
Frequently Asked Questions
How it works
Step 1. Answer a few simple questions
Step 2. Get tailored quote
Step 3. Get covered and start saving
Why Choose Us
We offer completely free and no obligation advice on Private Health Insurance Excess. Our experienced advisors will take the stress away from you and do all the hard work in finding you the best Provider by comparing quotes with the top leading providers in the market. We have worked directly with AXA, Aviva, Bupa and Vitality for over 40 years, we have been tailor-making the best policies for our customers.
Health Insurance People
Get expert advice from our dedicated health insurance advisors for free
24/7 Customer Care
You can contact us anytime and one of our health insurance consultants will always be available to you.
Claims Support
We will be there for you throughout the claims process to ensure that it is easy and stress-free.
