What is Health Insurance Excess?
Your excess is the amount of money you agree to pay towards a claim before your insurer covers the rest.
Think of it as a contribution to the cost of your treatment. The higher the excess, the more you agree to pay when you claim – and the lower your monthly or annual premiums will be.
How Does Excess Work in Practice?
Let’s say you’ve chosen an excess of £250.
- You need treatment costing £1,500.
- You pay the first £250.
- Your insurer covers the remaining £1,250.
If your policy has a per policy year excess, you’ll only pay this once each policy year, no matter how many claims you make.
If it has a per claim excess, you’ll need to pay it each time you make a claim. Most UK providers use a per policy year model, but it’s always worth checking.
How Excess Affects Your Premium
In simple terms:
- Higher excess = Lower premium
- Lower excess = Higher premium
By increasing your excess, you’re taking on more of the upfront cost, so the insurer reduces your premium.
For example, on a mid-level policy for a 35-year-old:
- £0 excess = ~£65/month
- £250 excess = ~£55/month
- £500 excess = ~£50/month
- £1,000 excess = ~£45/month
These figures are illustrative, but they show how choosing a higher excess can cut costs.
Choosing the Right Excess
The right excess depends on your personal situation:
- If you want to keep premiums low: A higher excess could make sense, especially if you don’t expect to claim often.
- If you’d prefer predictable costs: A lower excess may suit you better – you’ll pay more each month but less if you ever need treatment.
- For families: Remember you may pay the excess per person, so balance affordability with protection.
- For businesses: Higher excesses can reduce costs across a group policy, but make sure employees won’t be deterred from claiming.
Common Misunderstandings About Excess
❌ “If I choose a high excess, I’ll never need to pay it.”
If you claim, you’ll need to pay it – so choose a level you can realistically afford.
❌ “Excess applies every time I see a doctor.”
Not always. Most policies apply excess once per policy year, regardless of the number of claims.
❌ “It’s always best to pick the cheapest premium.”
A very high excess could make premiums cheaper, but you risk a big upfront cost if you need treatment.
Why Review Your Excess Regularly?
Your needs and circumstances can change over time. The excess you chose five years ago might not be the best fit today. Reviewing your policy annually with a broker ensures your excess – and your premium – are still aligned with your situation.
Final Thoughts
Excess is a simple concept, but it has a big impact on the affordability and value of your health insurance. The key is to strike the right balance: low enough that it won’t cause financial strain if you claim, but high enough to keep premiums manageable.
At Lifepoint Healthcare, we help clients tailor their policies to suit their needs and budget – including choosing the right excess. We’ll compare options across all major UK insurers, explain the details plainly, and make sure you’re getting the best value for money.
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