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Is private health insurance worth the money?

In this article, we look at whether private health insurance is really worth the premiums and what it covers

A photo of Daniel Sharpe-Szunko, the author

By Daniel Sharpe-Szunko

Published on: 13 July 2023

6 min read

Is private health insurance worth the money?

We are seeing a trend in the UK of consumers increasingly looking for health insurance quotes to access private medical treatment. While it’s true that the majority of UK residents have access to free healthcare through the NHS, recent issues and long waiting times have caused many of us to consider health insurance options.

One of the most common questions with health insurance is whether the yearly or monthly premiums are really worth paying. Many of us put off looking at private health insurance simply because we believe it’s too expensive and unaffordable. The reality is that modern health insurance is far cheaper than it used to be thanks to more flexible policies and ever increasing cover options.

In the UK around 8 million people pay for health insurance, also known as private medical insurance (PMI). It is currently increasing every month as more and more people look toward these sorts of policies to protect their health.

What is covered with health insurance?

There are many different types and levels of health insurance which range from core cover options with basic inpatient and cancer cover. Top levels of health insurance will provide cover for medical expensive such as comprehensive private medical care, diagnosis, outpatient care and therapies cover. Some may even include additional perks such as member benefits or your own private room when in hospital.

Basic private health insurance will cover the costs of scans, tests and surgery, as well as providing access to leading specialists and consultants. You should also be able to get consultations far more quickly via online GP services.

Comprehensive health insurance policies will usually include extensive outpatient treatments and therapies meaning far quicker recovery times. You can also include additional benefits such as dental and travel cover.

Why is health insurance good value for money?

This all depends on whether you believe that the NHS would be sufficient for you and your family members if you needed treatment or care. Most UK residents are fairly comfortable with the services that are provided by the NHS should they need it.

In recent times that have been issues with increasing waiting times in the NHS that have caused many people to consider health insurance. If you were to need treatment or surgery then it is likely that health insurance would offer good value for money based on higher levels of care and significantly reduced waiting times.

Another key difference between health insurance and the NHS is access to medications and treatments that may only be available privately. This is especially the case for cancer treatments which are currently restricted in the NHS.

Health insurance pros and cons

below is a list of the key benefits and potential drawbacks for standard health insurance in the UK.

Pros

  • Avoid NHS waiting lists
  • Access to the top consultants and specialists in the country
  • 24/7 online GP services
  • Ability to request specialist referrals
  • Medications and treatments that may not be available on the NHS
  • Select your own specific surgeon or specialist
  • Choose from the country’s top private medical facilities
  • Your own private hospital room
  • Faster cancer diagnosis and treatments
  • Therapies cover for quicker recovery times
  • Flexible policy options to suit most budgets
  • Option of several types of health insurance e.g. individual cover or family cover

Cons

  • Policy access can be expensive
  • Premiums will increase as you get older
  • Lose no claims discounts when you need treatment
  • Does not cover chronic conditions or pre-existing medical conditions
  • Can be expensive and unaffordable for many consumers
  • Basic cover might not be sufficient
  • The NHS can provide excellent care when required for free

What are the alternatives to health insurance?

If you’re still not sure about health insurance then here’s a list of possible alternatives for you to consider. Also, when you see these alternatives it might help to explain why health insurance is so important for so many people.

Pay for private treatment yourself

Most private hospital facilities offer payment plans and credit facilities to make private treatment more affordable for many people. You should consider the cost of private specialist treatment compared to the cost of health insurance to make sure that you are happy that the premiums are worth paying against paying for treatment yourself.

Basic private treatment such as cataract surgery or carpal tunnel release can seem fairly affordable for many. However, more extensive treatments and surgeries can run into 10s of thousands of pounds which is generally unaffordable.

Some of the more common higher priced procedures include hip or knee replacement which tend to be around £15,000 for the surgery. Prices for these types of procedures can also vary dramatically based on where it is carried out.

Options to pay for private treatments and surgeries

Self-funded

You may be fortunate and have sufficient savings to be able to avoid NHS waiting lists and fund private treatment yourselves. This might be more difficult with some of the more costly procedures and where you don’t have sufficient savings.

Medical loans

Another fairly common option is to apply for a medical loan to cover the cost of private medical treatment. These loans are usually available via the private medical facility where no health insurance is in place and there are no savings.

Speak to your employer about a company scheme

it is still fairly common especially in certain sectors, for employers to offer a group private medical insurance policy as an employee benefit. You might be able to speak to your company’s HR manager about starting a scheme in the future.

If your company does not have a scheme in place already it could be a good opportunity for them to look at something for its employees. You might also be able to discuss options around salary sacrifice or partially funding a policy yourself if your employer can’t afford to pay the whole amount.

You should be aware that these employee benefits are usually taxable and could cost more than paying privately in some circumstances. It is sometimes worth speaking to your employer before considering personal health insurance plans.

Self-insure

This is potentially an option for people who are less likely to be ill or have the means to be able to save money every month to put aside for treatment. There are risks with self-insuring if you become ill early and don’t have sufficient savings yet.

You also need to make sure but you are consistent with savings and look for high interest savings accounts or ISA’s to get the most from your budget. Ideally you should aim for a minimum pot of around £10,000 to have enough four major treatments and surgeries.

Rely on the NHS and do nothing

The final and probably most common option that people choose is to ignore private health insurance and rely solely on the NHS. Currently around 8 million people in the UK pay for health insurance, meaning the majority of people are happy to use the NHS or cannot afford to pay for cover.

The NHS is still perfectly adequate for the majority of treatments and provides extremely good care for free to most UK residents. Many high risk treatment for conditions such as heart attack, stroke and cancers are dealt with extremely well in the NHS.

How to compare the best health insurance policies

The best way to compare different health insurance policies quickly and easily is to speak to a specialist or a broker. This way you can compare different policies from some or all of the top medical insurance companies to find out which options are available and affordable for you.

There are many different options when it comes to private health insurance and several major medical insurance providers. It can be confusing when trying to find the best and most suitable option for you and your family, especially if you’ve never looked at health insurance before.

If you need help or guidance trying to find health insurance for you or your family then you can call our expert health insurance partners on 0800 009 6559 or click here.

You’ll be able to compare quotes quickly and easily from the top health insurance companies including AXA, Aviva, Bupa, The Exeter, Health-on-Line and Freedom Health Insurance.

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