How much should you be paying for health insurance?

March 5, 2021
minutes read time

When it comes to finding a private health insurance policy, the consensus in the UK is relatively clear. Studies have shown that over half of the UK population, 53%, would consider paying for private healthcare, and around 13% of UK consumers claim to hold a Private Medical Insurance policy. 

Is there such a thing as cheap health insurance?

Your health insurance policy should cover you for what matters most. Whether this is a reduced level of cover or fully comprehensive policy, we advise that you focus on your policy inclusions rather than the price. However, everyone should aim for the most cost-effective policy that does not sacrifice on the cover they need. This is where a comparison service or speaking to an independent health insurance advisor can help you to save money.

Factors affecting insurance costs

The cost of a private health insurance policy can be affected by a variety of determining factors, including the following:

Policyholder age

Your age at the point you take out a health insurance policy with a provider, or at the moment you renew your existing health insurance policy, can have a drastic impact on the overall cost. This is because your medical needs can often be dependent on your age, with your changing age affecting what your medical needs are. As reported by GP Online, chronic diseases become more common with age; the likelihood of having two or more significant conditions is 60% by the age of 75-79 years, and more than 75% by 85-89 years. Unfortunately, the older you get, the more likely you are to either have more medical needs or experience changes to them. Therefore, the premium of your health insurance policy is likely to increase in cost as you age, but you may be able to reduce your policy premium via other means.

Policyholder location

Another factor that may affect the cost of health insurance is your geographical location. Some health insurance providers may adjust their policy premium based on the location of the policyholder. For example, an individual living in London may experience higher premiums compared to an individual living in a rural area due to the higher costs of private medical care in London. You may be able to opt for alternative hospital lists that reduce your coverage for more expensive areas, and this is something to consider when comparing your options.

Number of named policyholders

To put it simply, the more people covered under your health insurance policy, the higher the monthly or annual premium will be. A Family Health Insurance policy will always be more expensive than an individual Private Health Insurance policy for one person, for the simple fact that more people will be covered under the same policy. However, when looking to cover more than one person, a group insurance policy may be the optimum choice, depending on your family or group's specific circumstances. For more information, you can learn about group or family health insurance in our blog article, and our expert team of advisors are always on hand should you want to get in touch and discuss your insurance needs further.

Current & pre-existing medical conditions

To bring you the most accurate health insurance quote possible, insurance providers may require additional background info, such as your medical history and any current or pre-existing medical conditions you might have. Depending on the provider, you may discover that certain aspects of your medical needs aren’t covered by your chosen policy, and is something you should be aware of. While your medical history shouldn't affect the cost of a health insurance policy, it may affect whether a provider is able to offer you cover for these conditions within your health insurance policy.

Choosing the right provider

Lastly, the cost of your health insurance can vary depending on the type of policy you choose to take out, as well as the insurance provider you go with. You may find that, depending on what you need from a health insurance policy, different providers will be better suited to your needs than others. As insurance experts, we can offer you clear, unbiased advice on the best provider for you and your unique circumstances, and this includes finding you the most cost effective insurance solution.

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Why do health insurance premiums increase?

When trying to find an affordable health insurance policy, one factor that you need to be aware of is that the cost of your health insurance policy may fluctuate over time. Health insurance premiums can go up for many reasons, including but not limited to:

Medical inflation

One reason for the increase to health insurance premiums every year is that the cost of medical treatment, and any supporting medical developments, rises over time. This is what's known as medical inflation, and as important medical innovations are made, the costs associated with benefitting from these innovations may naturally rise alongside them, such as the premiums you pay for a private health insurance policy.   

Pressures on healthcare providers

Another factor at play when it comes to the rising annual prices of health insurance premiums is the presence of pressures on healthcare providers around the country. This can be seen in a variety of different formats, from more people living for far longer, to scenarios of national medical emergency such as the COVID-19 pandemic. As pressures on healthcare providers increase, you may find that the cost of private health insurance will grow as a result.

Growing older

As previously alluded to throughout the article, the cost of insurance premiums will naturally increase as you age. This is due to changes that may be caused in your medical needs as you grow older, as well as the fact that you are more likely to make a claim on your insurance the older you get (as previously discussed by GP Online, this is due to the fact that comorbidities and significant health conditions grow more common the older a person gets).

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How to cut the cost of your health insurance

Once you know the factors that can affect your health insurance policy's cost, you can start to consider different cover options. The following considerations may help to cut the cost of your policy:

Review your cover

The vast majority of private health insurance policies are modular; in that they offer different benefits or 'modules' that can be added to the basic level of cover they provide. Whether you have already taken out an insurance policy and are looking to renew, or are looking to choose your first health insurance policy, you can optimise these additions to your cover to reduce the net costs. For example, if you are looking to renew an existing policy, you might have experienced significant changes in your circumstances that no longer necessitate a particular addition; so you can remove it from your cover upon renewal and reduce the cost.

Hospital lists

Most private health insurance providers have several hospital lists that offer different levels of coverage. For example, when selecting the Vitality Hospital Select option, you can choose between Local, Countrywide or London Care.

You may have the option to either reduce or extend the number of hospitals that are included within your policy. By opting for a reduced hospital list and treatment at private wings of NHS hospitals, you may reduce your insurance premiums.. But before making these changes, it is vital to get a clear picture of the cover provided by your policy and how this will be affected.

Reduce claims

When making claims on your policy, you may find that your premium rises come renewal as a direct result of this. If you find yourself consistently making claims on your policy, this may be indicative of a medical problem, and as such, the policy price may increase to reflect this increased risk. Reducing the number of claims you make, where possible, may help to reduce the price you pay. To help do this, you may be able to start taking health actions and altering your lifestyle to improve your general well-being, which may reduce your need for medical help and reduce the number of claims needed.

Some insurance providers may also offer no claims discounts when you renew with them if you don't claim. This can reduce the price you may otherwise pay if you were to renew without a no claims discount. The best way to make sure you're getting the best value for money when it comes to your private health insurance policies is to regularly review your policy to make sure it is the right fit. 

Member benefits 

Some health insurance providers may even reward their policyholders for taking positive health action. As an example, Vitality will reward healthy actions such as meeting with a diet planner, improving your nutrition, and logging your fitness activities using their app. These positive health actions can bring you a whole host of different rewards, such as discounts and access to exclusive apps, planners and other health resources. 

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How to get affordable health insurance in the UK

We have discussed the factors behind health insurance costs and how you can alleviate them, but if you are on the lookout for a way to find the most cost-effective health insurance policy, without skimping on quality, then utilising a health insurance broker such as Equity Health is a great place to start. As health insurance specialists that are wholly unaffiliated with any one provider, we can offer expert and unbiased advice on which insurance policy you should be looking to take out, whether you are looking for:

Our team of health insurance experts will help make the process of finding, comparing and buying a private health insurance policy easy and straightforward. Our FCA qualified advisors can help you to navigate the health insurance industry and offer completely free and impartial advice on what you should do. If you would like to receive health insurance advice from Equity Health, you can get in touch with one of our advisors here, or get a quote, to find the best health insurance policy possible for you.

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