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How does health insurance work?
Private health insurance can pay out for a range of treatments for illnesses and injuries. Here is how it works and what types you can get.
Pros and cons
Pros
Get treatment quicker
Choose your hospital and doctor
Your own private room
Covers treatment not on NHS
Cons
Expensive
Comes with exclusions
Usually comes with an excess
Most treatment available on NHS
Private hospitals often have no A&E department
You might get better care through the NHS
Your treatment options may not be local
What is it?
Also known as... Private medical insurance (PMI)
It pays for private medical treatment, tests and surgery if you are ill or injured during the policy's term. It is usually designed for acute conditions, which are curable and short term.
You usually pay a monthly amount for your health insurance, which is called the premium. Your insurance can pay out if you need treatment that it covers while the policy is active.
It is designed to offer treatment alongside the service provided by the NHS. For example, appointments with your GP would still be through the NHS. But with medical insurance you could get:
Treatment sooner
A choice of where you get treatment
A private room
A wider range of treatment types
What does it cover?
Health insurance can include cover for treatment you get as:
An inpatient: This includes staying in a hospital bed for tests or surgery.
An outpatient: This includes consultations, diagnoses and treatment when you do not need to stay overnight.
A day patient: This includes regular appointments but not staying overnight.
Comprehensive health insurance is usually more expensive but covers more types of treatment. Cheaper policies come with lower monthly premiums but pay out for less.
Some health insurers let you pick exactly what is covered from a range of options like:
Physiotherapy
Treatment for specific diseases like cancer
Psychiatric treatment
Dental treatment
Optical appointments
Medical treatment and nursing at home
What is not covered?
Each policy has different limits and exclusions, but most do not cover:
Chronic illnesses like HIV, including ongoing treatment for long term or incurable conditions
Elective treatment you choose to have, including cosmetic surgery and fertility treatment
Emergency treatment because ambulances and A&E departments at hospitals are usually run by the NHS
Treatment for drug abuse, e.g. spending time in rehabilitation
Treatment abroad, but this should be covered by your travel insurance
Care and treatment during pregnancy, although emergencies and health complications are sometimes covered
Many policies do not cover medical conditions you have already, for example if you have diabetes. But some policies include some cover for pre-existing conditions.
Cover limits
Like other types of insurance, the policies come with limits on how much you can claim. These can include annual limits on:
The total amount you can claim
How much you can claim per condition
How much you can claim for inpatient or outpatient treatment
How much you can claim per type of treatment (e.g. physiotherapy)
Some policies also only pay for private treatment if you have to wait six months or more for the treatment you need on the NHS.
What types are available
You could get a policy designed for:
Yourself
You and your partner, with a joint policy
Comprehensive medical insurance covers the widest range of treatment, but there are also more specific policies to cover:
You could also choose a policy for your age range if you are:
How much it costs
The cost of your health insurance policy depends on:
Your age, as it costs more when you are older
Your medical history, e.g. if you had cancer, diabetes or high blood pressure
Your family's history of conditions like heart disease, cancer or strokes
Your lifestyle could make premiums higher if you smoke or are overweight
What you cover, as including more conditions and types of treatment costs more
These factors can also affect if you can get some policies. For example, some insurers do not offer cover for pre-existing conditions.
How to lower the cost
A no claims discount: Once you have had health insurance for a while, your premiums could get cheaper if you do not make any claims.
The excess: This is the amount you have to pay towards treatment yourself when you claim. Choosing a higher excess usually makes your premiums lower but makes claiming on the policy more expensive.
Adding a wait period: This could give you cheaper cover. It means that if the NHS waiting list is less than your wait period (e.g. six weeks), you must get your treatment through the NHS. If the waiting list is longer, your policy pays for private treatment.
Using nominated hospitals: Your premium could be cheaper if you only choose to be covered at a few hospitals or surgeries. Check the ones you choose are located nearby or offer the specialist treatment or facilities you may need.
Proving your health: Some insurers reduce your premiums if you do not smoke or regularly use a gym.