Health insurance excess: Explaining what’s what

Before you purchase health insurance and even before you can get a quote, you need to decide on your excess amount. It’s only payable if you, or someone on your policy, claims on the policy. It might sound counterintuitive to pay for treatment before your insurer, but it helps to keep your premium more affordable.

Are you willing to take on a portion of the expenses before your insurance policy kicks in? This is what medical excess is all about.

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What is health insurance excess?

Health insurance excess is an amount you agree to pay to cover initial costs for a consultation or a treatment or when you’re admitted to the hospital. Your excess is paid once your treatment has commenced. When you take out private health insurance, there might be different conditions for excess. So, make sure you’re happy with how it affects other policy terms and the amount you have to pay.

How does a health insurance excess work?

Let’s say you have a £100 excess – this is the excess amount that you set at the start of your insurance policy. If you need expensive treatment, the insurer will cover the treatment bill after you pay the initial £100.

The coverage extends to those appointments, treatments, and medications that are normally included in the policy. Your excess only affects the cost of private health insurance and the amount of money your provider has to pay.

Can I choose my health insurance excess level?

Yes. You can choose your excess amount at the start of your insurance policy.

In some cases, it can be as low as £0 (although it’s quite uncommon). If your excess is set at £0, you won’t need to pay anything before making a claim. However, it is a more expensive option when it comes to premiums.

It’s more common to have excess set at £100, £250, £500, or even a higher excess level.

Why would you pay an excess?

An excess applies to any insurance product, whether it’s a car, home, pet, or travel insurance, regardless of who is at fault. From the insurer’s perspective, it helps them eliminate most of, or if not all, of the minor claims. From the customer’s perspective, it helps to keep the cost of the insurance policy down.

How and when do i pay the excess on health insurance?

The excess is usually paid by you directly to the insurer.

Before your visit to a medical treatment provider or facility, reach out to your health insurer to inform them that you’d like to make a claim and confirm your excess. If the cost of your appointment and treatment goes over the excess amount, your insurer will cover it.

Which excess amount is right for you?

Your choice of excess will affect your premium. Naturally, customers want to keep their premiums low, so they feel inclined to choose a higher voluntary excess.

However, you need to be realistic about the excess amount you can pay at short notice. You can’t predict when you’ll need to claim, so you need to be ready to pay your contribution towards your treatment at any time.

Can i change my excess?

Most insurers don’t allow customers to change their policy before the contract expires. Usually, if you’re not comfortable with your current excess, you’ll be able to change it at the policy renewal. But there is always a chance that the insurer will meet you halfway. Try to reach out to them directly or through a health insurance broker to see what can be done.

What is the benefit of a health insurance excess?

The main benefit for you is lower premiums. The higher the excess, the lower your monthly payments will be. The choice of excess gives you more control over your policy and how much you’re willing to contribute towards each claim.

Another benefit of having to pay an excess is that you save yourself a lot of time on smaller claims. You pay some money out of pocket while still having the safety of being covered in case of bigger, costlier treatments.

Should i add an excess to my private medical insurance?

If your policy incorporates a compulsory excess, you’re usually allowed to add a voluntary excess on top of it. But is adding voluntary excess worth it? If you can afford it, it might be a good idea. By adding an excess, you can either reduce your regular payments or improve the level of cover you can get for your money.

Try not to rush into any decisions regarding your insurance policy. Compare the insurance quotes available to you and see how an excess changes the policy terms. Ensure that it makes sense for you money-wise and doesn’t put you into a vulnerable position in case of a claim.