Health Insurance Premiums: All You Need to Know

What does the term “Health Insurance Premium” mean?

Your health insurance plan stays active with a monthly payment called a premium. The amount you pay is determined by your age, cover level, location and the insurer you choose. The term “health insurance premium” refers to individuals’ monthly payments to keep their insurance active. You can decide to pay this premium monthly, quarterly, or in one lump sum.

So, how does it work? When you need a treatment, your provider covers the costs but only if you have been consistently paying your premium, agree to pay your chosen excess and have not exceeded the annual out-of-pocket limit.

Are health insurance premiums typically paid on a monthly basis?

You have the option to pay monthly, quarterly or annual for individual policies. In company plans, private health premiums are generally paid monthly, with employees having a portion of their salary deducted for coverage. Alongside premiums, additional costs such as excesses, coinsurance and tax deductibles may apply. This enables the policyholder to maintain sufficient cash flow to cover other expenses while protecting their own and their family’s health.

How do I determine the cost of my premium?

To determine the cost of your health insurance premium, it’s crucial to shop around, especially if considering a switch in providers. Explore options through the health insurance marketplace or consult a broker, taking into account factors like medical history and pre-existing conditions when selecting a private health insurance plan.

What is an average premium?

Our health insurance expert gathered quotes from several providers to determine the average cost of health insurance in the UK. These rates apply to healthy, non-smoking individuals residing in the HA1 postcode with a £100 excess:

Insurer	Insurer
Aviva Health	£39
AXA Health	£41
Bupa Health	£45
The Exeter	£39
Freedom Health	£40
Vitality Health	£35

Your costs may differ based on individual factors. Typically, younger and healthier individuals enjoy lower premiums, while older individuals or those with pre-existing conditions may incur higher costs. Women often pay less than men due to longer life expectancy.

What is the minimum cost for premium?

The minimum health insurance premium varies depending on your chosen plan. For non-smokers in good health, it’s typically around £30-40 per month. This covers private treatments, avoiding NHS waiting lists and unexpected medical bills.

Individuals aged 16 and above can have their health insurance policy, while those under 16 are covered by their parents. If you’re between 16 and 25 and in full-time education, you can still be covered by your parent’s medical insurance policy.

Premiums vary based on coverage:

• A comprehensive policy with full outpatient cover, zero excess, and all London hospitals included comes with a higher premium.
• For healthier individuals expecting fewer claims, a standard outpatient plan with around 3 consultations per year, a selected hospital list, and added excess can lower monthly costs.

For older individuals or those with pre-existing conditions, adding an outpatient cover is advisable, increasing premiums. Some insurers, like Aviva, offer a six-week option to reduce costs, where you wait if the NHS provides a consultant appointment within this period.

If you expect frequent dental visits, adding dental cover, usually an extra £20 per month, is worth considering.

Health insurance premium example

If your employer doesn’t provide health insurance, you can choose individual or family health insurance in the UK, offering three levels of coverage: lower, mid-range, and comprehensive plans. Here’s a breakdown:

Basic Policy

These typically cover inpatient hospital treatment, surgery, and specialist consultations. They may also cover cancer treatment and therapies such as physiotherapy and chiropractic.

• Suitable for young individuals.
• Ideal for those who are gym-goers.
• Worse including some therapy coverage for potential injuries.

Mid-range policies

These provide more comprehensive coverage, including some outpatient care and diagnostics, mental health support, and alternative therapies like acupuncture and homoeopathy.

• Recommended for young families.
• Provides peace of mind for unexpected health issues.
• Often includes online GP services for convenient appointments.

Comprehensive policies

These offer the highest level of coverage and include full outpatient, full diagnostics and scans, full in/day patient and full cancer cover:

• Advisable for individuals aged 50 and older or those with pre-existing conditions.
• Offers extensive coverage, including frequent consultations with specialists.

Online GP services, standard in most plans, offer easy access to urgent appointments through a GP app. Making the right choice guarantees tailored protection for your health needs.

Example

Insurance providers provide various plans for you to choose from. You decide based on your needs, budget, and any additional coverage like employee benefit plans. For example, if your insurer presents two plans:

• Plan A: £125 monthly premium, £0 excess.
• Plan B: £75 monthly, £250 excess.

Plan A has a higher premium, but if you incur medical charges throughout the year, your overall costs may be lower compared to Plan B. Make your decision wisely.

Why Do Health Insurance Premiums Increase?

Health insurance premiums increase for several reasons. Factors such as inflation and rising healthcare costs play a role, along with individual elements like age, claims history, and lifestyle choices. Insurers adjust premiums to maintain financial stability, aligning with the policyholder’s risk profile and adapting to changes in the healthcare landscape.

Age

As you get older, the chances of needing medical care rise. Insurers might adjust your premiums to cover the potential increase in healthcare needs linked to ageing.

Location

Where you live affects your health insurance costs. For example, premiums in cities like London, Manchester, and Birmingham tend to be higher than in suburban areas due to elevated healthcare expenses in urban settings.

Claims History

Frequent or significant claims in your history impact your premiums. Insurers look at your past healthcare usage to assess risks, leading to adjustments in your rates.

Inflation

General inflation affects healthcare costs overall. As medical expenses increase with inflation, your health insurance premiums rise to maintain sufficient coverage.

Medical Inflation

The introduction of new medical procedures and treatments adds to expenses. This contributes to the rise in your health insurance premiums, covering the increasing costs of advanced medical interventions.

Your Lifestyle Choices

Certain lifestyles, like smoking or engaging in high-risk behaviours, pose health risks. Insurers may charge up to 50% higher premiums to address the increased likelihood of health issues.

Does making a health insurance claim lead to an increase in premiums?

Making a health insurance claim in the UK can affect premiums. For instance, Bupa uses a tiered chart with a maximum of 13 for claims. A claim may lower your tier, potentially increasing your premiums, while a non-claimant’s renewal premiums could be unaffected or see minimal changes, depending on the inflation rate.

When it comes to non-medical treatments like dental checkups, it’s important to review your policy documents. Some insurance providers may not consider claims for these services when assessing your overall claims history.

How to minimise health insurance premiums

While certain additional features in a healthcare package can be beneficial, they often come with a hefty price tag. If you are certain you won’t use or need a particular option, consider rejecting it when presented, or explore alternative providers that exclude it altogether.

To reduce health insurance premiums:

• Increase Your Excess- Opt for a higher excess amount to lower your premiums.
• Reduce Outpatient Cover- Tailor outpatient coverage to your needs for cost savings.
• Consider NHS Waiting Option- Choose policies with waiting periods for NHS appointments to lower costs.
• Limited Hospital List- Opt for plans with a more limited hospital network for lower premiums.
• Remove Optional Add-ons- Eliminate unnecessary add-ons to streamline coverage.
• Explore Health Insurance Brokers- Utilise brokers to find cost-effective plans tailored to your needs.

Summary

Now, you must have understood how health insurance premiums maintain the status of your health insurance coverage. These payments, which are often due on a monthly basis, play a significant role in how much your healthcare plan will ultimately cost.

So, if you want to secure your future and are looking to get personalised insurance, get associated with PremierPMI. As a prominent health insurance broker in the UK, we are here to provide bespoke solutions to our customers. We provide a vast array of services, including family health
insurance, kids health insurance, over-60s health insurance, self-employed insurance, couples health insurance, mental health insurance cover in the UK and many more.

For us, your health journey is of utmost importance and
therefore, we are here to support you by catering for your insurance needs. Trust us to get the best health insurance expert guidance and protect your health.

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