Is private health insurance worth it?

Most UK residents have access to free healthcare through the National Health Service (NHS), a state-funded service that provides comprehensive medical treatment to anyone, regardless of their ability to pay. So, it is fair to ask whether there is any worth in buying private health insurance.  However, around 8 million people in the UK pay for private health insurance (also known as private medical insurance or PMI) giving them fast access to medical care and more choice when it comes to medical consultations, scans and treatment. It is clear that some of these people use private health insurance to avoid increasing NHS wait times while others are looking for more varied and convenient options for their medical needs.

In this article we consider whether private health insurance is worth it. We explain how private health insurance works as well as the pros and cons of paying for a private health insurance policy.

For your specific needs, you may find it helpful to speak with a health insurance specialist* who can provide guidance and arrange the cover for you - you will receive £100 cashback when you buy your health insurance policy (this offer ends 31st January 2025).

What does private health insurance cover?

Most private health insurance policies cover you for referrals to a private specialist consultant to carry out diagnostics, treatment and follow-ups as an in-patient. You can include outpatient consultations and treatment as well as other medical care such as therapies and mental health support. Health insurance usually includes access to private GPs virtually and sometimes, in person.

Most private health insurance policies offer a list of options from which you can choose to build the private health insurance you wish to buy based on cost and value.

Some health insurance policies are limited in the options on offer while others are more comprehensive so you do have to search and compare health insurance carefully. More expensive private health insurance plans will usually offer outpatient care, including access to private medical consultations with specialists and consultants and may even pay you a fixed amount for each night you spend in an NHS hospital. For more information, check out our article "How to compare the best private health insurance policies".

Is private health insurance good value for money?

Yes, it can provide good value for money but like any insurance, its real value is only understood if you need to make a claim or use the services that it provides. The amount of value it provides will also depend on your own circumstances and what value you place on the benefits on offer. For some, the value will be wrapped in the peace of mind that having private health insurance gives them and their families. The convenience of attending medical appointments around your schedule of work or caring duties that you may have could be extremely valuable especially if it means that you can

Many would say that NHS hospitals can be as good as private hospitals and that the doctors are the same professionals you would usually see in the NHS. However, have you ever been to a theme park where you can buy premium tickets that get you to the front of the queue? Private health insurance is similar, as a major advantage is the faster referral process, with many people opting for it purely to avoid NHS waiting lists.

Private health insurance can also give you access to medication and treatment that may not be available on the NHS, which, using the theme park analogy means not only are you getting to the front of the queue, there's a chance that you'll get to ride the front and get a free picture on the way out.

The best way to understand whether private health insurance represents good value for money is to look at the pros and cons - we list some of these below. Weigh up what you would be prepared to pay for the benefits listed and then get a quote and see how they match up.

What are the pros and cons of taking out private health insurance?

Pros

• Quicker access to consultations, scans, diagnosis and treatment
• Specialist referrals at your request
• You may be able to get access to medication or treatment not available on the NHS
• You may be able to choose a specific surgeon or hospital
• You may be given your own private room
• Avoid NHS queues

Cons

• Cover can be expensive and the cost increases as you get older
• Does not cover chronic conditions such as diabetes, heart disease and high blood pressure
• Existing medical conditions are usually not covered (you could opt to include pre-existing conditions as an 'add-on', although this can be costly)

Should I buy private health insurance?

If you are still unsure whether private health insurance is the right solution for you, you could consider an alternative option. Below we explain some alternatives to buying a health insurance policy.

What are the alternatives to private health insurance?

Self-insuring

If you are rarely ill, you could consider 'self-insuring' which is the process of saving the money that you would have spent on private health insurance premiums. Rather than paying an insurance company, you would put the monthly equivalent into a savings account which will build up over time. The idea is that if you are then ill, you can use this money to pay for the treatment yourself.

Get your company to pay

Many companies and employers now offer private medical insurance as an employee benefit. You should speak to your HR manager to see if the option is available and if it isn't, you should ask whether it can be considered in the future. It is possible that you still have to pay a contribution towards the cover as it will likely be considered a taxable benefit, but your HR or accounts department should be able to sort out the necessary forms for you. Company health insurance schemes can be less costly than individual contracts. You can read more about health insurance for employees in our article, "Small business health insurance: Who can get it and how does it work?".

Paying for treatment yourself

If you already have savings that you could call upon, then you could just opt to pay for the treatment yourself, rather than paying for private health insurance. Remember that private healthcare costs can easily run into tens of thousands of pounds. Alternatively, you could opt for a lower level of cover (i.e. basic) that would help pay for the more expensive medical care that your savings are unable to stretch to or even set your health insurance up with a high level of excess which will reduce the cost.

Do nothing

People have mixed opinions about the NHS but the fact remains that UK residents get free treatment on the NHS and the UK is one of the few places in the world that provides people with free access to medical treatment. The NHS is usually very good at dealing with serious illnesses and offers priority treatment for cancers, strokes and heart disease. Private health insurance provides no improvement over the NHS for these types of illnesses and it is often the same doctors who treat patients in the private medical sector as those who work in the NHS. However, waiting times for consultations and treatment on the NHS can fluctuate and this may determine whether private health insurance is worth considering.

What is the best private health insurance policy?

You have likely heard of private health insurance providers such as AXA Health, Bupa, Aviva and Vitality but it is a competitive market so you shouldn't automatically dismiss some of the lesser-known providers such as C S Healthcare, WPA and Freedom. Where it becomes tricky is comparing the cover that each insurer provides, as it is not as simple as picking the cheapest plan.

Firstly, you'll need to choose the level of cover, and these typically fall into three categories: basic, intermediate and comprehensive cover. As you would expect, each type of cover offers a slightly different level of health insurance, each at a different cost. You will also need to choose the level of excess you are willing to pay; the lower the excess, the higher the premium.

You can reduce the cost of private health insurance if you choose a limited private health insurance policy that covers the cost of diagnostics and initial medical consultations and where you could be returned to the NHS once a diagnosis is made. These are often cheaper than health insurance solutions that also cover private treatment costs and could be attractive to those who are happy to be treated by the NHS after the initial investigations are complete.

Finally, you will need to opt for either a fully underwritten or moratorium policy, both explained in our article "How to compare the best private health insurance policies". In a nutshell, you either choose to disclose all of your medical information upfront or you can disclose limited medical information, but you may have to provide more details at the point of claim.

Where to buy the best private health insurance policy

Comparing private health insurance quotes is tricky as there are so many different types of cover available. There are also optional extras to consider such as dental and mental health cover as well as therapies like physiotherapy and osteopathy. Even comprehensive cancer cover may need to be added to a policy to provide this vital cover. Prices can also vary based on the hospitals you wish to have access to and this will be determined by those closest to you and your personal preferences.

A good place to start is to use a specialist health insurance comparison site*, as you will be able to see each policy side by side. An even better way is to speak to an independent specialist health insurance adviser*, as they will be able to talk you through the benefits of each plan and provide tailored quotes based on your personal preferences. You will receive £100 cashback when you buy your health insurance this way - the cashback offer ends 31st January 2025.

For more insight into the most popular private health insurance providers, check out our independent reviews of Vitality Health, Axa Health, Aviva, Bupa, The Exeter and WPA.

 

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