How Is Private Health Insurance Taxed?
Question asked by Paul Revell
I have had my renewal premium letter from my current health insurer and the premium has gone up from last year and it’s a little bit too high now. I want to have this cover but don’t want to pay quite as much. Are there any ways I can get cheaper Private Health Insurance?
If you are looking to lower your Private Medical Insurance premiums then you have a number of different options to consider, which are as follows:
By adding an excess you agree that you would pay that excess amount towards a claim.
With most insurers, the excess is only normally due once per policy year if a claim needs to be made (i.e. you wouldn’t need to pay the excess more than once even if you make multiple claims in the same year).
Excess choices range from £100 all the way up to £5,000, and adding an excess of £250 can reduce the monthly premiums by around 10%.
With this option it is possible to make your Medical Insurance cheaper by accepting that if the NHS waiting list is less than 6 weeks long then you would have your treatment on the NHS.
If the wait is longer than 6 weeks, you would receive your treatment privately. Including this option can lower your monthly premiums by around 25%.
This option only applies to inpatient care. Inpatient care is all treatment requiring the use of a hospital bed. If you’ve added outpatient care onto your policy to receive cover for diagnostic tests / scans etc. then you’ll receive this privately as soon as possible.
The 6 week NHS wait only kicks in once it becomes apparent you need inpatient care.
The main factor that determines the price of Health Insurance is the level of outpatient cover (i.e. cover for initial tests and consultations).
If your policy has become unaffordable then it may be worth lowering the level of outpatient cover. With most insurers, even with no outpatient cover you would still be covered in full for inpatient treatment, which means that the cost of major treatment (such as an operation) would still be covered.
It may be the case that your current insurer is not providing the best deal for your cover.
It is therefore worth reviewing the rates offered by other insurers to ensure you are getting the cheapest health insurance option with like-for-like cover. Thus, it may not be necessary to reduce your level of cover if other insurers are offering more competitively priced cover.