How much does private medical insurance cost?
The benefits of having private medical insurance are obvious, how much it will cost is not as straightforward as it is dependent on several variables. These variables are always different for everyone. Where you live, how old you are, your medical history and the product options you choose are the main factors that determine the cost of a health insurance policy.
Once you understand how health insurance works you will see why one size does not fit all, there are many options to choose from.
What is private medical insurance?
Private medical insurance (PMI) or health insurance is a policy that pays out for medical treatment privately when you need it. Health insurance is designed to cover you for acute conditions, with prompt treatment in a private hospital by a consultant or surgeon of your choice.
There are many benefits in having private medical insurance, but the main advantage is bypassing long NHS wait times and being able to choose who provides your treatment, and where you are treated.
The prices below are based on someone living in Warwickshire (near our headquarters), a non-smoker wanting a mid-range policy with an excess of around £200. The prices are based on an average across all the leading UK insurers and are per month.
25-year-old – £25-£30
45-year-old – £40-£45
65-year-old – £80-£85
What factors affect the cost of private medical insurance?
The reason why it is not easy to give an accurate cost for health insurance without speaking with you and obtaining further details is because there are lots of variables.
These variables are in two categories: your personal circumstances and the level of cover you would like.
Your personal circumstances
Insurers understand that the older you are the more likely you are to need medical advice and treatment, thus increasing the risk of a claim on the policy. As with all insurance policies, the premium is calculated on a risk ratio and will increase the older you are. Some insurers cap age-based pricing on joining after 80, so if you are 83 you will pay the same as someone who is 80 or 87 when you join.
As hospital charges can vary significantly from region to region in the UK, where you live can be a big factor in the price quoted. London hospitals are the most expensive when it comes to hospital and consultant charges. If you do live in London and need access here, there are often options to select a reduced list of London hospitals rather than all of them, which will work out cheaper.
If you don’t live in London, you can opt for a ‘local’ hospital list which will give you the most competitive premium. AVIVA Health offer a ‘signature’ list which only includes hospitals in Scotland and Northern Ireland. If this is where you live and you do not intend to travel for treatment it can work out very competitive.
Although most insurers do not ask for your BMI or even smoking status (some do), your previous medical history can play a part in the calculation of premiums. If you are taking out health insurance for the first time you will most likely not have to declare any medical history, therefore your premium is not based on this. If you are switching your health insurance to a new provider, you will be asked certain questions regarding your medical history and the information you provide will determine the premium quoted. When switching providers, the premium will also be driven by the underwriting method chosen. You can read more on underwriting options here.
The level of cover you choose
The exact details of what an individual health insurance plan covers varies considerably from policy to policy. Standard policies cover surgery, consultations, nursing, and hospital charges. While comprehensive policies cover much more, including out-patient appointments, psychiatric treatment, and complementary medicine.
Health insurers have designed their products with two elements: core cover, which is the base policy, and additional benefit options for you to choose from, to either reduce or enhance your cover.
There is often a great deal of flexibility in how you build your health insurance policy, and this will determine how much you will pay for private health cover. Here are some of the benefit options you can choose which will affect the premium you will pay.
Out-patient cover ranges from no cover up to full cover with options in between such as £500 or £1000. The limit is either a combined limit to include out-patient consultations and diagnostics, or with some insurers you can upgrade the out-patient diagnostics to full cover, which is separate to the limit for consultations.
An excess is the amount you will pay towards a claim, the higher the excess you choose the lower the premium will be. Excesses range from £0 up to £5000 and are usually paid once per year should you claim. VitalityHealth give you the option to pay your excess per claim which will reduce your premium.
Most leading insurers offer a ‘guided option’ which members can apply to their policy, resulting in lower premiums for their health insurance. With this option, the insurer offers you a select list of consultants and hospitals to choose from rather than the full list.
Mental health cover
You can choose to extend your cover with this add-on which would give you access to in-patient and out-patient psychiatric treatment, including diagnostics, hospital charges and specialist fees, and up to 28 days in-patient treatment.
With the therapies add-on you will have access to treatment such as osteopathy, acupuncture, physiotherapy, or chiropractic care.
Dental and optical cover
The dental add-on includes reimbursement for routine, major and accidental injury costs. While the optical benefit will reimburse you for the cost of glasses or contact lenses and eye tests.
Some insurers offer both European and Worldwide travel cover as an additional benefit on your health insurance policy. There is also a winter sports upgrade option and cover for travel vaccinations available with some policies. The travel add-on covers you for all the usual travel related issues as well as cover for medical emergencies while you are abroad.