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How Does Private Health Insurance Work?

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What is Private Health Insurance?

Private Health Insurance, also known as Private Medical Insurance (PMI), is designed to cover the cost of private medical treatment.

It allows you to avoid long waiting times for treatment on the NHS and ensures you get the most appropriate care as quickly as possible.

In exchange for monthly payments, your insurer will cover some if not all of the cost of private treatment (depending on your coverage).

Our handy guide will tell you all you need to know about how Private Health Insurance works and how to get the best policy for your circumstances.

What Does Health Insurance Cover?

Private Medical Insurance policies cover certain types of conditions and treatments. Most our modular with many insurers providing options to increase or decrease cover as you wish to tailor your policy to your specific needs.

Acute vs Chronic Conditions

Medical Insurance is designed to cover acute conditions only.

Acute conditions can be reversed through treatment and are not permanent.

For example, hip pain due to the need for a joint replacement would be considered an acute condition because it can be treated surgically.

Chronic conditions, which are long-term afflictions that can only be managed rather than treated, are not usually covered by Health Insurance policies. These include conditions like diabetes, asthma, or psoriasis.

However, acute symptoms of chronic conditions may be covered by your policy and insurers typically cover any medical attention necessary in the lead up to the diagnosis of a chronic condition. This will all be at your insurer’s discretion.

Inpatient-Only Cover vs Outpatient Cover

Typically, PMI ‘core’ cover allows you to receive inpatient treatments only. These are treatments where you require a hospital bed, such as after surgery.

Outpatient cover can be added to your policy separately to increase the level of cover under your Health Insurance.

Outpatient cover typically involves all treatment where you don’t need a bed, such as diagnostic tests (x-rays, MRIs, blood tests, CT scans) or physiotherapy.

How to Apply for Private Medical Insurance

Finding the Best Private Medical Insurance policy involves a lot of comparing and shopping around.

Below is the general process you need to undertake to ensure you get the best policy and premiums for your circumstances.

  • Step 1
    Find out what you want from your policy and what you can afford.
  • Step 2
    Compare Private Health Insurance providers to see what they offer.
  • Step 3
    Collect and compare online health insurance quotes from UK’s leading providers to find out what they will cover and how much it will cost.
  • Step 4
    After choosing your provider and policy, complete an application over the phone, online, or in person.
  • Step 5
    Once your application is approved, you will receive the details of your policy and you can start paying premiums.
Nadeem Farid Independent Protection Expert at Drewberry

Buying Health Insurance is a process that shouldn’t be rushed and can often be confusing with all the options.

Rather than tackling the task alone, if you need some help just pop us a call on 02084327333 or email

Nadeem Farid
Head of Employee Benefits at Drewberry

How Do Private Medical Insurance Premiums Work?

Premiums are the regular payments that you make to your insurer in order to maintain your policy. Usually these are paid on a set day each month.

How Are My Health Insurance Premiums Calculated?

The cost of a health insurance policy depends on a range of factors. For the most part, your personal situation will have the biggest effect on the cost of your premiums. When you apply for a policy, your insurer will ask you for the following information:

  • Age
    The older we are, the more likely we are to need medical treatment and so the more a policy costs.
  • Smoker Status
    If you’re a smoker, you’re more likely to become ill, and with a serious illness such as cancer, which means you’ll pay more for cover.
  • Location
    Where you’re based in the UK will impact your policy; if you live near expensive hospitals, such as in Central London, you’ll pay more for your cover.

You’ll also have a range of policy options to choose from that will change the way in which your Health Insurance premiums work:

  • Hospital lists
    The list of hospitals you are eligible to use will affect the cost of your Health Insurance, with more expensive hospitals meaning higher premiums.
  • Outpatient cover
    Outpatient cover involves any treatment where you don’t need a bed. You have the option for full outpatient cover, outpatient cover up to a set limit or no outpatient cover at all.
  • 6 Week NHS Wait 
    Some providers will offer this option, which means that they will only pay for treatment if the waiting list on the NHS for that treatment is longer than 6 weeks, thus lowering the likelihood of you claiming and the cost of cover accordingly.
  • Excess 
    How much you’re willing to pay upfront for your treatment before the insurance policy takes over, e.g. the first £100 towards your care.
  • Additional extras
    Optional extras on your policy, such as dental and optical cover, will increase the cost of your premiums.
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Will my Private Medical Insurance Premiums Change?

It is very likely that over time the cost of your private medical insurance premiums will change.

This is because at the end of every year, your policy is renewed and your premiums will be changed to fit your new circumstances as well as your insurer’s new circumstances.

Some of the main reasons why you may see your Health Insurance premiums increase are as follows:

  • Medical inflation
  • Your increased age
  • Your increased risk of claiming for expensive treatments
  • Potential increase in Insurance Premium Tax (IPT)
  • You have recently claimed on your policy.

How Does Health Insurance Underwriting Work?

The underwriting of your policy determines the conditions you will be covered for.

There are different types of underwriting that can make a significant difference the conditions you are covered for.

Full Medical Underwriting

FMU is the most basic type of underwriting as well as usually the cheapest.

When you’re fully medically underwritten, you provide your medical information to the insurer before your policy has been put in place.

The insurer will use this information to look at your medical history and decide whether or not they’re willing to cover any pre-existing medical conditions.

Pre-existing conditions that insurers are not willing to cover will be added to your policy’s list of exclusions and you will not be able to claim for them.

This will typically apply for the entire term of your policy, but some insurers may be willing to negotiate having conditions taken off your exclusions if you have had the policy for a while and not claimed for them.

Moratorium Underwriting

Moratorium Underwriting is more complex and usually more expensive compared to FMU.

Rather than giving your medical history at the start of your policy, insurers will look at it when you make a claim.

There are typically two types of Moratorium underwriting that will determine whether or not you will be able to claim for a condition when the time comes.

Rolling Moratorium involves all conditions that you have suffered from in the past 5 years being automatically excluded. But they will be taken off of your list of exclusions if you have served 2 years on your PMI policy without receiving any advice, medication or treatment for the condition.

Fixed Moratorium is the more lenient option but is no longer offered by many insurers. While all of your conditions in the last 5 years will still be excluded, your insurer will consider adding the condition after 2 years with the policy, regardless of whether you have received treatment for it.

How Do Private Health Insurance Claims Work?

One of the most confusing areas for people who don’t know how Private Health Insurance works is how people make a claim or what happens when they claim.

How Do I Make a Claim?

  • Step 1
    In most cases, your treatment will start with a referral from your GP. Some Health Insurance policies have options to skip GP referrals for cancer or musculoskeletal symptoms, but the majority of cases will require an open GP referral from an NHS GP.
  • Step 2
    Contact your insurer to make a claim. When you first take out your policy, you’ll receive the contact information of their claims team.
  • Step 3
    Give your insurer your policy number (which can be found on your policy) as well as the information they require about your condition and your referral from your GP.
  • Step 4
    If your claim is approved, your insurer will either recommend a specialist to you or you can use your referral to find an approved specialist yourself.
  • Step 5
    Your insurer may provide you with some form of proof that your claim has been accepted (e.g. a letter or a code) that you should take with you when you go for treatment.
  • Step 6
    Book the necessary appointments and undergo your treatment.
  • Step 7
    After your treatment, the bill will go to your insurer to either be paid in full by them or to have their share of the costs paid for, minus any excess you must pay.


Exclusions are conditions that you are not able to claim for.

Most Medical Insurance providers have their own standard exclusions that they place on their policies which you will find in your policy terms and conditions. Common exclusions that you will find on UK PMI policies include the following:

  • Fertility Treatment (IVF)
  • Cosmetic surgery
  • Conditions relating to normal pregnancy/childbirth
  • Emergency care
  • Kidney dialysis.

In addition to these exclusions, your insurer may add any pre-existing conditions you may have suffered to your policy’s exclusions during the underwriting process.

Get Advice Comparing Private Health Insurance

Private Health Insurance can be a complicated policy to purchase because there are so many different options available. If it is all getting a little confusing and you need some help then please don’t hesitate to turn to us for some Private Health Insurance advice.

Why Speak to Us?

We started Drewberry because we were tired of being treated like a number and not getting the service we all deserve when it comes to things as important as protecting our health and our finances. Below are just a few reasons why it makes sense to talk to us.

  • There is no fee for our service
  • We are independent and impartial
    Drewberry isn’t tied to any insurance company, so we can provide completely impartial advice to make sure you get the most appropriate policy based solely on your needs.
  • We’ve got bargaining power on our side
    This allows us to negotiate better premiums for you than you going direct yourself.
  • You’ll speak to a dedicated expert from start to finish
    You will speak to a named expert with a direct telephone and email. No more automated machines and no more being sent from pillar to post – you’ll have someone to speak to who knows you.
  • Benefit from our 5-star service
    We pride ourselves on providing a 5-star service, as can be seen from our 2049 and growing independent client reviews rating us at 4.92 / 5.
  • Gain the protection of regulated advice
    You are protected. Where we provide a regulated advice service we are responsible for the policy we set-up for you. Doing it yourself or going direct to an insurer won’t provide this protection, so you won’t benefit from these securities.
  • Claims support when you need it the most
    You have support should you need to make a claim. The most important thing when it comes to insurance is that claims are paid and quickly. We are here to support you during the claims process and make sure it’s as smooth and stress free as possible.
Drew Nelson Health & Wellbeing Expert at Drewberry

We are here to offer impartial and, most importantly, fee-free Health Insurance advice.

If you want to talk through your options to make sure you are looking at the most suitable cover then don’t hesitate to  pop us a call on 02084327333.

Drew Nelson
Health & Wellbeing Expert at Drewberry

Extremely satisfied with the help and advice from Drew, since the beginning him understood what I was looking for and have the patience to help me out with all my questions and doubts. Didn’t tried to be push or annoying calling me all the time like so many did before. At the end we find the perfect medical policy for me and my daughter that covers everything that we need. I more than recommend them and if in the future I need something else for sure I will contact them again. Giving only 5 stars because I can’t give 6!!!!

Natasha Caversan Mucci
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