The ultimate guide to private health insurance. Find out how private medical insurance works, what’s covered and the best insurers rated by thousands of real customers
What is private health insurance?
Millions of people in the UK are covered by some form of private health insurance – also known as private medical insurance, or PMI.
But what is it? And how does it work?
At its most basic, private health insurance pays out for private treatment if you fall ill.
However, private health insurance doesn’t cover you for everything and differs from provider to provider.
Generally speaking, health insurance is designed to pay for private treatment of medical conditions that respond quickly to treatment (usually called ‘acute’ conditions), as well as elective surgery and medical tests.
This guide explains exactly what you need to know about private health insurance – from how it works to which providers offer the best service to customers.
What does private health insurance include and exclude?
What you are covered for depends on your provider, but there are some elements usually included in most policies. Elements with a ✓ are covered as standard and those marked with a ✘ are usually excluded.
✓ Inpatient treatment
Most policies cover the costs of inpatient treatment (where you need a hospital bed for the day or overnight), including tests and surgery.
✓ Outpatient treatment
Outpatient treatment (where you see a consultant or tests or scans to help diagnose conditions) is covered under many policies but the amount you can claim for may be capped.
Cheaper policies cover fewer types of outpatient treatment and have lower caps.
✓ Hospital accommodation and nursing care
A stay in hospital and limited nursing care is included in most policies.
✓ Exclusive drugs
Some policies will include drugs unavailable on the NHS, but that have been approved by the National Institute for Health and Care Excellence.
✓ Extra cover
Cover for psychiatric treatment varies between insurers. This is a difficult area for providers as it blurs the line between curable illness (which is covered) and long-term care (which isn’t). Comprehensive policies may include psychiatric treatment, but not all do.
Some policies also offer complementary therapies- such as physiotherapy or chiropractor – a private ambulance, home nursing, a 24-hour advice line, and parental accommodation if your child is in hospital. Again, a comprehensive policy is more likely to cover these areas.
✘ Pre-existing medical conditions
Private health insurance is easier to buy if you’re healthy. Many insurers exclude pre-existing medical conditions, instead focusing on conditions that respond quickly to treatment.
This doesn’t mean, however, that private health insurance is unsuitable for those with pre-existing conditions, it just might be difficult to get the cover you need.
✘ Longer-term conditions
Your policy won’t pay for longer-term treatment such as kidney dialysis, or illnesses such as asthma.
✘ Other conditions
Other exclusions include drug abuse, normal pregnancy, organ transplants, infertility and non-essential cosmetic treatments.
What are the different types of cover?
There are two main types of private health insurance – fully underwritten or moratorium policies.
Fully underwritten policies
If you choose fully underwritten private health insurance, you will have to give your provider your full medical history.
With a moratorium plan, you will only need to give limited information to your insurer.
Purchasing a moratorium policy is more convenient than going through your extensive medical history with your insurer – but fully underwritten plans can actually be cheaper and you’ll know from day one which conditions you’re covered and not covered for.
Some insurers also have specialist policies. For example, some only cover you when you have to wait longer than six weeks for NHS treatment. Other policies are designed specifically for the over-55s, or have a special focus on one disease, such as cancer.
Modular, pick-and-mix style policies are becoming more common. These cover you for in-patient treatments but also allow you to add or subtract elements of cover so that you tailor-make your insurance package.
Do I really need to be treated privately?
We’re lucky enough in the UK to have the NHS, which provides comprehensive healthcare that’s free at the point of need. Accessing private healthcare, meanwhile, is far from cheap – for example, the cost of hip or knee replacement surgery is easily likely to exceed £10,000. What’s more, the quality of private treatment isn’t likely to be better than that you’d receive through the NHS. So why pay?
The main appeal of private healthcare is greater choice of where and when you are treated, and the speed and convenience in getting the treatment.
Private health insurance is, therefore, one means of fast-tracking lengthy waits without needing to have tens of thousands of pounds handy.
How much does private health cover cost?
Like many other types of insurance, the costs of private health insurance vary depending on your circumstances and the specifics of the cover bought.
Similarly, where you live can have a dramatic effect on costs of treatment – and consequently, on the premium you’ll pay.
Premiums also inevitably rise with age. For younger customers, a comprehensive health insurance policy might cost a few hundred pounds a year. For customers over retirement age, cover is more likely to be well into the thousands.
The table below shows some example quotations of what two couples (aged 35 and 55) would potentially pay annually if they sought cover for surgery, comprehensive heart and cancer cover and also cover for therapies (such as physiotherapy).
Costs could be considerably more for those with pre-existing conditions and/or previous claims, and they also continue to rise with age.
|Provider||Policy name||35 year-old couple||55 year-old couple|
|Aviva||Limited Cover with Other Treatments & therapies||£736||£1,236|
|AXA PPP||Core Cover with Therapies option||£1,053||£1,822|
|BUPA||Treatment & Care||£1,073||£2,090|
These are illustrative quotes obtained from the insurers’ websites in September 2021. We selected the cheapest combination of cover providing full inpatient care, comprehensive heart and cancer cover, and some cover for therapies for a couple, in good health, living in South London.
Outpatient cover was removed where it was possible to do so. We selected no excess, but did select a waiting time where offered.
The best private health insurers for customer satisfaction
No private health insurer is truly delivering if they’re letting you down on service.
Between May and June 2021, we surveyed 538 Which? members that own private health insurance and have made a claim within the last five years. Members can see how five insurers – Aviva, AXA PPP, BUPA, Saga and Vitality Health – fared in our analysis of their service.
|Provider||Ease of contacting the insurer and speed of reply||Clarity of terms and conditions||Clarity of the claims process||Informing you of the costs of claims||Updates about the claim|
In May 2021, we surveyed 538 members of the Which? Connect Panel who claimed within the prior 5 years. Customer Score reflects respondents’ overall level of satisfaction with, and likelihood of recommending, the insurer. Customer Score sample sizes – Aviva (64), AXA PPP Healthcare (103), Bupa (195), Saga (45), Vitality Health (40)
What do different private health insurers offer?
Aviva offers a comprehensive policy called ‘Healthier Solutions’, and a ‘Speedy Diagnostics’ policy.
Healthier Solutions – comes in ‘Limited’ and ‘Full’ tiers of cover. The main difference is that Limited lacks outpatient consultations, diagnostic tests, therapies, non-surgical treatment and outpatient mental health treatment, which come as standard with ‘Full’.
However, there are options to customize using either as a starting point to increase or reduce the cover. Non-standard options, such as in-patient mental health cover, and alternative treatments and therapies, can also be added.
Speedy diagnostics – as the name implies, in the main, this cover ends once a condition has been diagnosed. It pays for prompt access to tests, scans and hospital charges whilst a condition is being investigated.
AXA PPP Healthcare is the second largest health insurer in the UK.
Its Personal Health Policy offers as standard inpatient treatment, including comprehensive cancer care – alongside outpatient surgery, tests, and scans.
You can tailor to increase the range of outpatient cover available and other extras, and add in a six week waiting period.
You can also scale back the cancer cover to ‘NHS Cancer Support’ to reduce the premium. With ‘NHS Cancer Support’, AXA doesn’t pay for your cancer treatment unless it’s for licensed cancer drugs that aren’t available through the NHS.
The largest health insurer in the UK, Bupa runs a wide network of private hospitals as well as offering insurance.
You can choose between its ‘Treatment and Care’ and more expensive ‘Comprehensive’ levels of cover. The core difference between the two is that the latter covers a wider range of outpatient tests and consultations than the former.
One area in which Bupa stands out is in offering a month’s worth of treatment for mental health conditions as standard.
Within both Bupa’s cover tiers, you can further adjust cover levels and excesses.
This includes a choice between full cancer cover and the more restrictive ‘cancer cover plus’ –which comes into play specifically to cover required cancer treatment not available through the NHS.
Saga provides insurance exclusively to customers over 50.
Saga offers five plans – ranging from ‘Super’ (the most comprehensive option) to ‘Saver’ and ‘Support’ – which are the most streamlined and only available by phone.
Super, Secure and Saver Plus all cover inpatient and outpatient surgery, chemotherapy, radiotherapy, and surgical cancer treatment, and scans and therapies – although benefit limits in some areas (such as scans) vary between the three.
Super adds elements such as mental health treatment and dental injuries benefit.
You can tailor and improve your policy so as to cover hypertension, add cash benefits for everyday health costs, and also extend the level of cancer cover so as to fund treatment of drugs not available on the NHS.
Vitality is well known for its Active Rewards Scheme, which rewards members for living healthily. Members get points for logging healthy activities (e.g. walking or gym workouts) via activity tracking devices. The points earn members discounts on products and perks with partner companies.
Vitality’s health insurance policy, like most, provides full inpatient cover, cancer care and outpatient surgical procedures as standard – along with extras such as mental health support and home nursing.
It has limited standard outpatient cover (£500 a year) – but the plan is highly customizable and more cover can be added, with a ‘full cover’ option removing the cash limit.
You can choose a fixed excess to pay towards claims, which you can select as being payable per plan year or per claim (reducing the premium).
How do I buy cheap private health insurance?
Speak to a broker for help
Private health insurance is a complicated product so it’s best to speak to a broker, especially if you have had medical problems or need specialist cover for certain illnesses.
To find a broker, check out the British Insurance Brokers’ Association (BIBA) or the Association of Medical Insurers and Intermediaries (AMII).
Cut your costs by tweaking your policy
Once you have picked a policy, you can start to cut costs by tweaking the cover.
Start by considering your choice of hospitals. Most providers will give you a list to choose from and you may be able to cut costs if you opt for a shorter list.
Decide which parts of the cover are really important to you – as many insurers allow you to pick and choose from modules. For instance, dispensing with, or reducing, outpatient cover (for the most part, consultations with doctors and scans), can take hundreds off the annual premium.
Some insurers also provide an option of scaling back on fully comprehensive cancer cover –providing cover, for instance, that only kicks in if you need treatments or drugs that aren’t available through the NHS.
Excesses, co-payments and wait periods
Next, think about adding an excess to your policy. If you’re content to contribute to the cost of treatment yourself your premiums will fall, just make sure you can afford to pay the excess.
‘Co-payments’ are a variation on the excess theme. With a co-payment, you commit to paying a percentage of a claim’s cost (say 10% or 15%) up to a maximum amount (say £1,000).
You’ll receive a discount on the premium because you’ll be leaning less on the insurer – but the maximum amount means you won’t find yourself facing unaffordable amounts.
Also consider whether you’d be willing to have some treatment on the NHS. Many policies allow you to choose discounted cover that kicks in only where the NHS can’t provide it quickly (usually six weeks). So, if speed of treatment is your main reason for going private, this can be a good compromise.
Beware ditching and switching
Private health insurance is nothing like car and home insurance where switching each year brings you savings. Trying to ditch your current provider to get a better deal – while certainly not impossible – can be tricky.
Unless you’ve expressly arranged for the same conditions and exclusions to be covered by your prior insurer – an arrangement known as Continued Personal Medical Exclusions – conditions you’ve developed with the prior policy are likely to be considered pre-existing and therefore not covered.
Meanwhile, as you get older, and are considered more of a health risk by the insurance industry, your premiums will rise – making it tougher to find a cheaper deal.
If you’re considering ditching and switching always check your potential new policy against your existing one to make sure it has everything you need.
Stay as healthy as you can
Some insurers will give you discounts if you stay healthy. Aviva’s MyHealthCounts scheme, for example, rewards you with up to 15% off your renewal premium if you’re fit and healthy.
What are the alternatives to private health insurance?
Private health insurance from your employer
This is less an alternative to health insurance than it is an alternative way of owning it. Many employers offer health insurance as a perk of the job.
Employer private health insurance schemes are usually cheaper and more generous – for example, covering pre-existing conditions – than policies you can buy separately from an insurer.
Healthcare cashplans are generally much cheaper than private health insurance, but are only designed to cover everyday health expenses such as dental work, glasses, contact lenses, or physiotherapy.
The cover you get is unlikely to extend towards the costs of serious medical treatment, such as an operation.
You pay a monthly premium, and the cashplan provider will reimburse you for medical expenses covered in the plan. There’s an annual limit on how much you can claim, with more comprehensive policies having higher limits.
Critical illness cover
Critical illness insurance cover is often sold with life insurance and pays out a cash lump sum if you’re diagnosed with one of a number of listed critical illnesses, including some types of cancer, a heart attack or stroke, multiple sclerosis or the loss of limbs.
A critical illness policy can be used to pay for anything – and so might include medical treatment costs, adaptations for your home (such as mobility aids, special equipment or structural changes required due to a disability), or to pay off your mortgage.
The one thing it doesn’t do is provide a regular income, which income protection does.
The illnesses covered vary between insurers, so get advice before buying a policy and check the policy document. Pre-existing conditions tend to be excluded, but some insurers will base cover on your medical history
Find out more in our full guide to critical illness insurance explained.
Most people who make use of private healthcare do so via insurance, but paying directly – ‘self-paying’ – is increasingly common.
The costs that you can expect to chalk up will include the initial consultation and any necessary diagnostic costs, the price of the treatment itself, hospital fees and followup care. Hospitals often sell these as a package.
The price you would pay as a self-payer versus what an insurer would be invoiced for are often different. Insurers can sometimes negotiate lower prices – but on other occasions there will be preferable discounts only available to self-payers.
Comparing providers of private treatment
Going private for medical treatment gives you extra choice, but also potentially opens up additional confusion when deciding where to go and working out how much procedures will cost.
Your GP may be able to provide some advice, as might your health insurer.
Another source of information worth considering is the Private Healthcare Information Network (PHIN), which was tasked by the Competition and Markets Authority to help make the private healthcare more transparent to consumers by compiling and publishing data on private hospitals and consultants.
You can use PHIN’s website to compare options in your area – including customer ratings of local private hospitals, and fees charged by different consultants.
- Find out more: The PHIN website
How to claim on your private health insurance policy
Step one: Read your policy document
Different health insurers have different claims processes. If you’re planning to seek private treatment, read the small print of your policy or check your insurer’s website to see whether there’s specific guidance.
Step two: Speak to your GP
Start by speaking to your GP about your condition as you normally would. Your GP can refer you for private treatment. There are two main types of referral; an open referral, where your GP doesn’t address the letter to a specific consultant, or named referral, where a specialist is listed on the letter.
Read the terms and conditions of your policy to check which one your provider will want.
Step three: Call your private health insurance provider
Next, call your provider and explain the situation. What you’ll need when you call will differ from provider to provider, but consider the following:
- Your policy number
- Details of what your GP told you
- Details about your condition
- Details of your referral.
Step four: Call your private health insurance provider (again) once you have seen a specialist
Once you have seen a specialist, call you provider again to let them know what steps will be taken next. Also, make sure you understand how you’ll pay for any consultations or treatment – either you’ll have to pay and claim the money back, or you’ll provider will pay directly.
Step five: Don’t be afraid to complain
If your claim doesn’t pan out as you expect, or you feel that your insurer has treated you unfairly, don’t be afraid to complain.
Speak to your provider first, but if it isn’t proving helpful (and you have exhausted their complaints process) take the matter up with the Financial Ombudsman Service by calling 0300 123 9123.