What is a Health Insurance Excess?

I am looking into Private Health Insurance and I’m unsure whether or not I should include an excess. What exactly is a Health Insurance excess and why should I add one to my policy?

Question asked by Thomas Pearson

What is Health Insurance Excess?

With Private Health Insurance, an excess is perhaps the best way to save money on premiums without compromising on cover.

It’s the amount you agree to pay upfront towards the cost of your private medical care before the insurance kicks in to cover the rest. The higher your excess, the more you’ll contribute towards your healthcare costs and so the lower premiums will be.

Most insurers only require you to pay an excess once per policy year. That means you’ll pay your excess towards your first treatment in a given policy year and won’t have to pay it again thereafter, regardless of how many claims you make.

However, some insurers have the option to pay the excess once per claim. This is obviously a more expensive option for you personally if you make multiple claims per policy year.

Read your policy’s terms and conditions carefully to work out which one applies to you.

How Does a Health Insurance Excess Work?

When you apply for your policy, you decide how much you want your excess to be. Excesses range from nil, meaning the insurer meets 100% of your medical costs, to up to £5,000 depending on the treatment you need and your provider.

A £0 excess is the most expensive option in terms of Heath Insurance premiums, as you won’t be contributing anything towards your private medical care.

If you don’t set an excess when you first take out your policy, most providers allow you to do so later on. You’re usually free to change your mind after your Private Medical Insurance policy has started.

When Do I Pay It?

Once your insurer has set up your policy and you’ve arranged your excess, that’s how much you’ll have to pay towards your claim, either per claim or once per policy year.

You usually pay the excess upfront, before you have private medical treatment. To make a claim, you contact your insurer, who’ll give you an authorisation number. You take this number with you when you go for your private consultation and pay the excess before your appointment begins.

Should I Add an Excess to my Private Medical Insurance?

One of the biggest benefits of setting a Health Insurance excess is that it can reduce the cost of your policy quite considerably.

Adding an excess of as little as £200 can cut premiums by as much as 10%. See for yourself how much of a difference an excess can make on premiums by comparing Private Medical Insurance quotes online here.

However, when setting your excess, it is vital that you’ll be able to afford it. You don’t want to set an excess so high you’d struggle to pay it if you needed to claim.

I’ve held a policy with Drewberry for several years now. They are always friendly, insightful and offer great service.

Dan Pettitt
13/01/2021
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