Is private health insurance worth it?

How does private health insurance work?

The cost of private health insurance is based on your age, where you live and the chosen level of cover. The older you are when you take out private health insurance the more expensive it will be. Where you live affects the cost of treatment – top doctors in London charge more for consultations.

Most private medical insurance claims start with a GP referral – and your private health insurer may provide fast access to a GP if you struggle to get an appointment locally. Sometimes this may be on the phone. With a GP referral, the diagnostics and treatment can begin.

There are many excess options. Generally the larger the excess you can accept, the lower the cost. Some policy options have a cap on treatment costs while others are unlimited.  

Basic policies stick to in-patient or day-patient treatment (when you need a bed) but outpatient cover can be added. Some policies allow you to choose which hospital you would like to use or which consultant you want to see. You can also add other extras.

Private health insurance policies usually pay for your treatment directly to the provider. You do not need to pay out of your own pocket and reclaim the costs.

Private medical insurance policies are underwritten in different ways and this will make a difference to your ability to claim.

• Find out more: Best private health insurance

Looking to buy private health insurance?

Find the right private health insurance policy using the service provided by LifeSearch.

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Individual full medical underwriting

With full medical underwriting you will be asked detailed questions about your medical history at the outset. For certain conditions, the insurer will ask if you have ever had them. For other conditions, it will only matter if you have had them in the past five or seven years. The insurer may then exclude any pre-existing conditions.

The medical underwriting process means that when you buy the insurance, you'll have clarity around which of your conditions are covered or excluded.

Moratorium underwriting

With moratorium underwriting, there are no pre-checks. Instead, any recent conditions (usually, those that you've had within the last five years) are considered 'pre-existing' and automatically excluded. 

Going forward, if you're then free of the condition - requiring no treatment, medication or follow up - for a 'moratorium' period (typically lasting two years) that condition will then be covered. Conditions that need ongoing medication or regular follow up are likely to never be covered.

It's quicker and simpler to buy policies with moratorium underwriting - but if you have any medical conditions, it may be the case that fewer of them are covered - and there will be less clarity about which ones are and aren't - than opting for full medical underwriting

Switching provider

Once accepted for private medical insurance it is often possible to later switch to other providers even if you have claimed. If the new insurer agrees, you can switch on  ‘continuation of underwriting’ terms, which means it will continue covering the conditions that were covered on your prior policy.  Be aware - if you don’t switch on this basis, you may lose cover for some of your conditions.

Independent advice

Many of the online policies use moratorium underwriting. This is the simplest way to buy insurance - as you don’t have to answer lots of medical questions, but it can create uncertainty as to what conditions are or are not covered. Basic policies will exclude outpatient cover. Not all firms handle claims as promptly or as smoothly. There may be other factors that are important to you or to your family. It might be worth seeking professional, independent expert advice. 

Visit the AMII (The Association of Medical Insurers and Intermediaries) to find a health insurance expert. 

What does private health insurance cover?

Standard private medical insurance (PMI) policies will cover acute treatment of in-patient and day-patient hospital treatment. 

Acute medical issues are those that will respond to treatment and from which you can recover. They include illnesses and injuries.

Being an in-patient or day-patient means you’ll use a hospital bed even if you are home later the same day.

While cover limits and benefits vary between policies, they can typically be expected to include cover for tests, procedures, anaesthetists, surgeons, nursing, dressings and bandages and hospital drugs, plus meals. Private health insurance will also pay for some drugs and treatments that may not be available on the NHS due to their cost.

Higher levels of cover are available to include outpatient services, mental health services and therapies, such as physiotherapists, chiropractors, orthopaedics and acupuncture. Further add-ons can include dental and optical cover. 

• Find out more: Private GP appointments: what to know

What typically isn’t covered?

Private medical insurance will not cover most chronic conditions. These are long-term conditions with no cure. For example, diabetes. The better policies will cover acute flare-ups related to a chronic condition, such as if you get a cataract as a result of diabetes.

Pre-existing medical conditions are normally excluded unless it's explicitly stated otherwise or the insurer has agreed to cover some of yours (see sections on underwriting).

Pregnancy is excluded, as are injuries from playing professional sport and cosmetic surgery. Certain jobs, such as oil rig workers, are excluded. Basic policies only cover in-patient treatment. Outpatient cover is extra.

Chronic conditions which may not be covered

Health insurance policies in the UK typically do not cover ongoing chronic conditions that require long-term treatment, have no cure, or are likely to recur. Chronic conditions that may not be covered could include:

• Diabetes
• Asthma
• Crohn's Disease
• Chronic Obstructive Pulmonary Disease (COPD)
• Arthritis (e.g., rheumatoid arthritis, osteoarthritis)
• Multiple Sclerosis (MS)
• Heart Disease (e.g., coronary artery disease, heart failure)
• Hypertension (High Blood Pressure)
• Epilepsy
• Chronic Kidney Disease
• Parkinson's Disease
• HIV/AIDS
• Cystic Fibrosis
  

Find out more: Life insurance for people with diabetes explained 

What are the benefits, especially compared with the NHS?

The quality of procedures and appointments are likely to be much the same as it would be using the NHS, largely as many private doctors also work for the NHS.

The benefits of private medical insurance are that it generally gets you diagnosed and treated faster than on the NHS. It may also give you more choice about hospitals or which consultant you see. There are some treatments that the NHS cannot afford to buy but private medical insurers will pay for.

Patients can also expect to be treated and recover in private rooms with access to home-comfort facilities, wider choice of food and family visits, not available on the NHS.

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Does private medical insurance help you jump NHS queues?

Having private health insurance is not a golden ticket to jumping NHS queues.

By taking out a policy, you are using a private healthcare system, which may have links to the NHS but is an alternative system.

If you have private health insurance, you may receive treatment faster as it might be quicker to book a Private GP appointment and be referred. This is one of the main reasons people turn to private health. Having a policy, however, is unlikely to help you see a local NHS GP any sooner as you will be subject to the same waiting times as everyone else. 

Who needs private health insurance and why? 

Thanks to the NHS, in the UK no one needs private health insurance. However, if you can afford private health insurance you may decide it is worth the investment.

With the NHS struggling, delays in getting treatment have grown. Immediately post-Covid, more people than ever chose to pay for private health insurance or self-fund treatment, such as hip or knee replacements.

Out of 14,821 Which? members we surveyed in June 2023, one in five members had paid for private treatment in the past two years and were generally happy with their treatment.If you are considering private health insurance, it could be worth getting a quote as the cost will vary greatly depending on your age, any pre-existing conditions, and where you live. You can then make an informed decision on whether it is an affordable option.

• Find out more: NHS waiting times: what to do if you're facing treatment delays 

Family health insurance

Private medical insurance is available for families. You can get a family policy or individual policies for each family member.  You may get discounts for buying additional policies – a husband and wife might get 10% off the second policy, for example.

If you have insurance provided at work you can get cover for your spouse or children.

• Find out more: Family income benefit insurance explained

Health insurance with pre-existing conditions

If you have pre-existing medical conditions, you’ll usually not be charged extra to add them to your policy (as you might with travel insurance, for example) - instead, the insurer will exclude those it can’t cover.

With individually underwritten policies you will be told this up front. With moratorium underwriting the exclusion will apply when you make a claim. However, once you are insured and there is no exclusion, a condition cannot then be excluded after you make a claim. You will be covered for the rest of your life.

With most insurers, you now have a no-claims discount - which means that if you claim, your premium will probably go up as a result. This may mean that you are discouraged from using the insurance because of the impact on cost. Check the terms and conditions of any policy closely to understand how claiming impacts the cost you pay.

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Health insurance for the self-employed

If you are self-employed you get no sick pay, so it’s almost more important for you to have private health insurance. You can take out an individual policy or, if you run a company, you might take out a corporate policy for you and your staff. You will need to account for it as a benefit in kind on your P11D.

• Find out more: Income protection insurance 

Do you need health insurance if you get it from work?

If you have private health insurance from work, it’s generally best not to double up with a personal policy. Check the cover available and consider buying only missing cover. So, if your work policy is for in-patient treatment only, buy a standalone outpatient policy. If your work policy covers your wife only, take out policies for your children.

What are the typical costs and what affects them?

Private health insurance is priced based on your age and postcode. Independent firm LifeSearch has provided the following prices based on someone in the Midlands in May 2024. Basic cover excludes outpatient care. Comprehensive includes unlimited cover.

• Find out more:NHS vs private maternity care: what are your options?