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Factors affecting the cost of private health insurance

There are a large number of factors which will affect the cost of your private health insurance, but broadly, they can be separated into two camps, those you have control over, and those you don’t.

Pricing factors you have control over

When you’re configuring your health insurance policy there are certain of choices you will need to make, all of which will affect the eventual price of the policy. The most important are:

How many people are on the policy

The more people you have on a private medical policy the higher the price will be, however, what we often find is that the price per person comes down after you add three or more people to a quote. Businesses, especially large ones, benefit from much lower prices per person for instance, and some providers will cover partners or children for free on family policies

The level of cover you choose

The level of cover you choose, and specifically whether you would like to be covered for outpatient treatments and diagnosis will significantly affect the price of your policy. 

Inpatient Cover

All private medical insurance policies cover the cost of inpatient treatments, meaning those where an overnight stay is required. We should point out that this is only for acute medical conditions, which are those that can be cured. No health insurance policy in the UK will cover you for chronic conditions, although you may find that if you have outpatient protection, they will cover the cost of diagnosing the condition.

Outpatient Cover

By including outpatient protection, you will also benefit from receiving treatment for conditions where an overnight stay in hospital isn’t required. So for instance, receiving physiotherapy following a recent injury would be covered by most comprehensive policies which include outpatient cover. Emergency services are strictly excluded, however, and you should always use NHS services in the event of an emergency.

The excess on the policy

The excess you choose will range from £0 to £1,500 per claim per annum - naturally, the higher the excess the less your health insurance premiums will be. We always recommend keeping excesses relatively low to avoid a sudden additional cost when you’re unwell - it’s the last thing you need.

Which hospitals you want access to

Most insurers will have a fixed list of hospitals that they will give you access to. These mid-range private hospitals will be spread across the UK, but typically won’t include expensive facilities in Central London. You can choose which hospitals you have access to, and depending on which you choose, your premium will increase or decrease. 

Any additional extras

If you opt to include things such as routine dental and optical cover, or in some cases where it isn’t already included, mental health cover, the price of the policy will increase.

Pricing factors you won’t have control over

There are a number of factors you won’t have complete control over when it comes to the price of your health insurance policy, we haven’t gone into too much detail with these, but they include:

  • Your location (usually not easily changed)
  • Your medical history
  • Your age
  • Your profession
  • Inflation in policy premiums
  • Cost of recent claims to the insurer

Example Prices For Private Health Insurance

With the cost of health insurance varying so significantly from individual to individual, it’s almost impossible to provide some realistic figures for discussion.  We appreciate that you may be reading this article just to get some rough costs so we have done our best to provide some for you.

Assumptions made to provide approximate costs

In order to provide you with some approximate health insurance costs, we’ve searched all of the leading private medical insurance providers and assumed:

  • All the individuals are in good health
  • They’re non-smokers
  • They’re looking for a comprehensive policy, including outpatient cover
  • They’re willing to pay a £200 excess
  • They don’t want any additional extras on the policy
  • They’ll be underwritten on a moratorium basis
  • They’re based in the same postcode as our Bournemouth office

We’ve then looked at prices for varying age groups and for individuals, couples and families. 

Cost of health insurance for a 30-year-old

 £37.43 per month

Cost of health insurance for a 50-year-old

 £63.71 per month

Cost of health insurance for a couple who are both 30 years old

£74.98 per month

Cost of health insurance for a family of four

£78.70 per month

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How to reduce the cost of health insurance

So far in this article, we’ve outlined the factors which affect the price of private health insurance policies, along with some example pricing, but what if you want to reduce the cost? This section covers most of the ways we can help you to reduce the cost of private medical insurance:

Adding outpatient limits or removing cover entirely

If you are looking to reduce the cost of your health insurance significantly and you have some outpatient cover, you could review how much you need moving forward. This option isn’t appealing for many people, as they want continued outpatient cover, but did you know you can add cash limits to your policy, so for instance, the first £1,000 of outpatient treatment is covered, but nothing thereafter? This is a good way to strike a balance between staying on budget and still having some protection.

Opt for a higher policy excess

Probably the most straightforward solution to reduce the price of your health insurance is to increase your policy excess. While on the face of it this is simple and easy to do, we do always suggest caution in this respect, as no-one likes to be faced with a big bill when they are unwell.

Add a 6-week wait 

You can add a 6-week NHS wait clause into the policy, which effectively says if the waiting list for the treatment you require is less than 6 weeks on the NHS, you will go down that route, rather than privately. It’s an effective way of reducing the cost of policies, but it does sacrifice your level of cover.

Have a local hospital list (good for those outside of London)

When you take out a policy, the hospital list will often cover a network of nationwide private hospitals. While on the face of it this is a good thing, if you live outside of London, you could potentially be paying for access to hospitals in the capital that you may never visit. It’s always worthwhile building a bespoke hospital list, and if your budget is tight, focussing on hospitals in your local area, as this will bring the cost of your policy down. Unfortunately, if you live in London, this method of cost reduction isn’t viable.

Always compare providers, especially at renewal time

Shopping around is hugely important and you’ll often find that you can save considerable amounts of money by switching providers at renewal time. It’s why we offer our free of charge Renewal Review service, where we do the leg work on your behalf each year and come back to you with the best options.

Try to give up smoking

If you’re a smoker, your premiums for health insurance and other insurances, such as life insurance, will be higher. By quitting smoking you will not only enjoy better health, but your insurance premiums for these products will reduce too.

Remove supplementary cover

There can sometimes be supplementary or optional cover that has been added to a policy which isn’t really needed. We recommend looking at your policy in detail to establish whether you actually need everything that has been included.

Review your underwriting method

The two main types of underwriting used for private medical insurance are Moratorium and Full Medical Underwriting, and changing the method used can sometimes yield a saving. A word of caution though, changing the underwriting method must be done with great care so as not to negatively affect your medical history.

Speak to an expert

Finally, to make sure you have the best policy for the best price, one that covers you for what you need but no more, you should speak to a qualified expert. To get your free comparison quotes and to speak to a health insurance specialist click the link.

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