Is private health insurance worth it?

Record numbers of people are paying for private healthcare amid frustration at NHS waiting lists and difficulty accessing care. Here we explain whether going private is worth it.

Across the UK last year 272,000 people self-funded an operation or diagnostic procedure at a private hospital – a third more than the year before the pandemic, according to figures from the Private Healthcare Information Network (PHIN).

Over double that figure had their treatment paid for using a private medical insurance policy.

Private health insurance could get you seen quicker, but there are costs to consider. And, as with all insurance policies, there will also likely be limits, restrictions and things that you cannot claim for.

In this article, we explain:

• What is private health insurance and what does it cover?
• Does health insurance covers pre-existing conditions?
• How much does private healthcare cost?
• Do I need private health insurance?
• How do I choose a private healthcare plan?

Related content: Guide to life insurance

What is private health insurance?

Whether you are worried about cancer, have a niggly knee or some other symptoms that are troubling you, then private healthcare insurance has an array of benefits, albeit coming at a cost. 

In return for your premium, you’ll get swift access to private healthcare from assessments and diagnosis through to treatment and aftercare.

You will also often get to choose which specialist you see and may be able to attend a private hospital close to you.

Private health insurance doesn’t just support your physical health either. The best private health insurance companies are increasingly providing more support for mental health too.

What does private health insurance cover?

Exactly what is covered by private health insurance will vary between providers and the level of cover you choose.

However you can typically expect the following with comprehensive private health insurance:

• Private consultations with specialist doctors, but unlikely to cover private GP consultations
• In-patient treatment, including surgery
• Out-patient services including scans, tests and x-rays
• Physiotherapy for problems such as back pain or sporting injuries, generally limited to 12 sessions
• Access to round-the-clock medical helplines and virtual GP appointments

However it is important to note that private healthcare insurance won’t cover all your medical needs.

There are some important exclusions, including:

• Emergency treatment. If you need urgent medical help you should always consult your GP, call 999 or head to Accident & Emergency.
• Maternity care. Although you can pay to give birth in a private hospital, it won’t be covered by your insurance policy, nor will any regular pregnancy appointments.
• Chronic conditions. You won’t be able to claim for arthritis or diabetes treatment, for example.

Does private healthcare cover pre-existing medical conditions?

Pre-existing medical conditions are health problems that you already have when you first take out a private health insurance policy.

These conditions are highly unlikely to be covered by your policy. However with a “moratorium” policy, cover may be reinstated if you go two years from the date you took it out without suffering any symptoms or requiring any treatment.

Another exception may be if you have private health insurance from your employer. Some top-level schemes will provide cover for pre-existing conditions.

How much does private healthcare cost? 

Private healthcare prices can be eye-watering.

The average cost of a hip replacement is likely to be around £12,198, according to research from the independent insurance information service myTribe.

Meanwhile you could be spending up to £3,200 on having a cataract removed and £8,000 for slipped disc removal.

By comparison the average cost of private health insurance is around the £1,500 a year or £125 a month, according to figures from financial comparison website Unbiased*.

Costs can vary substantially though and varies according to factors such as your age and where you live.

Your health and lifestyle come into play too – a smoker will pay more than a non-smoker.

A significant driver of cost is the level of cover you choose too as you will see when you are comparing private health insurance plans.

Also bear in mind it will cost more if you want family private health insurance with a partner and children included. We have more in our guide to family life insurance.

How to get cheap private health insurance

Although private healthcare costs can be off-putting, the good news is that there are variety of ways you can keep costs down.

• Match your cover to your budget and priorities – Do you really need additional benefits like dental and optical cover? Is psychiatric care you priority?
• Increase your excess – Agreeing to pay a contribution to your claims can be a great way of cutting costs without reducing your overall cover.
• Choose a six-week wait plan – Some insurers will reduce your costs if you agree to use the NHS if you can be seen within six weeks (or four or eight weeks, depending on the provider).
• Reduce your hospital list – The most expensive policies will let you choose a hospital. However, you can save a lot of money with a plan that only gives you access to a more limited network of hospitals.
• Stay fit and don’t smoke – Healthy individuals are less likely to claim. So private healthcare plans will often reward people who don’t smoke and have a healthy lifestyle with cheap private medical insurance.

Do I need private health insurance?

The decision over whether to buy private medical insurance is entirely yours and based on your own individual needs.

If you are worried about the length of NHS waiting lists, then private health insurance could provide you with priceless peace of mind.

Alternatively if you are more relaxed and have faith that the NHS will be there when you need it, you may not consider it a priority or worthwhile expense.

But for some people it’s also a matter of practicalities. If you are self-employed, for example, private healthcare insurance could mean poor health or an accident doesn’t stop you earning money any longer than necessary.

Alternatively if you like the idea of going private when you need to, but don’t fancy shelling out for insurance, you can always consider paying it for yourself.

You can either earmark some of your savings for medical expenses, or ‘self-insure’ by paying money into a dedicated savings account each month, but you must be mindful however that medical expenses can be very expensive.

You may find that you have used all your savings before you complete the required medical treatment.

How do I choose a private healthcare plan?

You can buy private health insurance direct from providers. Or you could use an online comparison website or broker who will scour the market for you.

Given the complexity of the product and the range of options, the latter is often a sensible option to ensure you find the best private health insurance for you. You can find one in your area with the Association of Medical Insurers and Intermediaries’ online tool.

Before you start researching your options it’s also worth double-checking whether private health insurance is a benefit you can claim at work as part of your employee benefit package. This will be the cheapest way of arranging cover.

Private healthcare companies: 

• Aviva
• AXA Health
• BUPA
• The Exeter
• Freedom Health Insurance
• General and Medical
• Saga*
• Vitality
• WPA 

Find out more: Mortgage protection insurance vs. income protection

So is private health insurance worth it?

Ultimately whether or not private health insurance is worth it comes down to:

• How worried you are about the state of the NHS
• The length of time you may have to wait for a diagnosis or treatment

For some people, who end up making multiple claims, it could end up offering excellent value for money, others might end up shelling out just for peace of mind. 

Unfortunately without a crystal ball it’s impossible to know which camp you would fall into.

As private health insurance is expensive it’s also important to consider whether you can afford it. It won’t provide peace of mind if it is putting you under financial strain.

Other types of insurance to consider

Private health insurance is the only policy that will directly reimburse you for the cost of private healthcare.

However there are other products that can provide you with financial support if you are seriously unwell or die.

Critical illness insurance for example pays out a lump sum if you are diagnosed with an illness or condition covered by the plan, while life insurance pays out a lump sum if you die during the term of the plan.

These two different types of covered are often bundled together in one plan with one monthly premium.

Alternatively you can go for income protection. Rather than paying a lump sum, it pays a monthly benefit to replace your salary if you suffer an illness or injury that stops you working.

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