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How does private health insurance work?

In this guide we find out how private medical insurance works. We look at what it does and doesn’t cover and how to make a health insurance claim.

What is private health insurance?

Health insurance gives you access to private healthcare and helps cover the cost. It’s also known as private health insurance or private medical insurance (PMI).   
It can cover seeing a private GP, physiotherapist, or mental health professional. It also covers treatment in private hospitals and access to specialist drugs and ongoing care.

People take out private health insurance for many reasons, but these are the main ones:

Fast access to specialist healthcare 

With private medical insurance, you can see a GP or specialist without having to wait long. And you’ll get fast access to treatment if you need it. Shorter waiting times can lead to earlier diagnosis and quicker treatment.

Manage your health on your terms 

With private medical cover, you can talk to a GP at a time that suits you. You can make appointments that fit your schedule and choose where to have your treatment. Some insurers even let you choose a consultant from a list of qualified doctors.  

Private hospital rooms

With private health insurance, you can choose to have treatment in a private hospital, where you can get your own room with a private bathroom.

Access to a wide range of treatments 

With private medical insurance, you'll have access to many treatment options. This may include treatment that you might currently pay for, like physiotherapy and mental health support. 

Peace of mind 

Private health insurance takes away the frustration of waiting to see a specialist. It provides peace of mind when it comes to your or your family's health.


Find out more: What is private health insurance?

How does private health insurance work?

Private medical insurance helps pay for a range of medical treatments, tests, surgeries and medication as long as you have a health insurance policy in place.

When you set up the health insurance plan, you decide the type of cover you need. Insurance companies often offer a standard level of cover. They also offer additional cover for an extra cost.  

You pay your premiums each month or year. When you need treatment, you can check with your insurance company to see if you can have that treatment at a private hospital. This means you can often choose when and where to have the treatment. You can sometimes choose from a list of approved practitioners.  

With some physiotherapy and mental health treatment, you may be able to refer yourself for treatment without needing to see a GP first.

The cost of your treatment will be covered by the insurance company. In some instances, you may need to pay an excess. An excess is an amount that you pay towards your medical treatment before your insurance company picks up the rest of the cost.

What does private health insurance cover?

Private health insurance differs between insurance companies. So it’s a good idea to shop around to get the best type of cover for your needs. But most health insurance cover includes:

Private GP consultations 

Access to video consultations and 24-hour health advice lines. Vitality also offer up to £100 per plan year towards private prescriptions and minor diagnostic tests.  

Hospital treatment 

The insurance covers in-patient and day-patient hospital and consultant fees. In-patient and day-patient diagnostic tests including pathology, radiology, and CT, MRI and PET sans are also usually covered in full. However, out-patient diagnostic tests are not covered as standard. A separate out-patient benefit limit is required. Surgical out-patient procedures are also covered. Some insurers cover treatment you can have at home, such as chemotherapy. 

Cancer care 

Your private health insurance can cover cancer care and support. This includes early risk assessments, discounted screenings and treatment.

Mental health support 

Access to early intervention therapies such as CBT, and counselling through talking therapies.  At Vitality, we cover up to 8 sessions of talking therapies. As a member, you can self-refer for talking therapies, meaning you don’t need a GP referral.


Health insurance plans usually cover a set number of physiotherapy sessions. Vitality covers up to 6 sessions of physiotherapy, no GP referral needed. You can choose a physiotherapist from an approved list.

Optional extras 

Many health insurance plans also offer extra options. These include out-patient cover, dental insurance, and sight and hearing tests. It may also offer travel insurance and even weight loss surgery.

What does private health insurance not cover

Most private health insurance won’t cover routine treatment. Usually they won't cover long-term conditions like diabetes or asthma. They’ll usually cover treatments for conditions that you’re likely to recover from.   

Quite often, they’ll also exclude any conditions you had before taking out the insurance.   

The following are usually excluded by private health insurance: 

  • Emergency and cosmetic treatments 
  • Childbirth 
  • Treatment for alcohol and drug abuse.  
  • Any treatment that takes place outside the UK.  

Each provider has different exclusions. So, be sure to read their terms and conditions with care.

Working out your premiums

Your health insurance premium is the price you pay for your insurance. Most insurance companies allow you to pay in monthly instalments or once a year if you prefer. 

Your premium is based on many factors, such as:

  • your age
  • where you live
  • your medical history and lifestyle
  • type of cover
  • the excess you choose.

Find out more: How the cost of private health insurance is calculated?

Health insurance cover limits

Some insurance companies put a limit on how much they’ll pay out over time, or for particular treatments. These are known as cover limits. The three most common cover limits are:

  • annual limits
  • lifetime limits
  • per-condition limits.

Let’s take a look at how they work.

Annual limit. This is the maximum amount that the insurance company will pay out in one policy year. This annual limit can apply to the total amount paid out over 12 months. Or, to the total amount paid for one type of treatment in a year.

For example, the annual limit  for physiotherapy treatment in one year is £500. You claim £600 of treatment. You’ll need to pay the £100 difference between the annual limit and the total cost of your treatment in that year. The limit will reset when you take out the policy for another year.

Lifetime limit. This is the maximum amount that your provider will pay out over the lifetime of the policy. So, if you have £100,000 as a lifetime limit and you hit that limit after five years of having the policy, your insurance company won’t pay for any more treatment.

Per-condition limit. Insurers sometimes put limits on the amount they’ll pay out for each condition. Say for example, you’re seen privately for a back problem that needs several scans and pain killing injections. Your condition then escalates to needing in-patient surgery and physiotherapy. The insurance company have a maximum payout for this condition which you exceed when you have surgery. This means there are no more funds to pay for your physiotherapy.

It's important to understand cover limits, as you may find yourself paying for treatment when you didn’t expect to.

Optional extras available with private medical insurance

Most insurers offer a range of optional extras for services that aren’t covered by their standard insurance. They allow you to tailor your cover to suit your needs. Here are a few examples of extra cover offered by providers.

Optical, dental and hearing cover. This type of cover helps you pay for routine private check-ups and preventative care. It can help towards the cost of dental procedures, prescription glasses and hearing aids. 

Additional therapy cover. Insurers usually offer a limited number of sessions in their standard cover. Additional therapy can include extra chiropractic treatment and osteopathy. Plus, access to chiropody/podiatry, acupuncture, homeopathy and even a dietician.

Mental health cover. Vitality offers mental health support within their core cover. But with this optional extra you can also include in-patient and day-patient treatment.

Out-patient cover. In-patient and day-patient treatment fees are often covered by standard private health insurance. However, out-patient fees may only be partially covered, or not covered at all. This additional cover pays for out-patient diagnostic tests and physiotherapy.

Making a health insurance claim

There are various ways to make a claim and different ways that insurers pay for your treatment. We cover the main options here.

How to make a claim

Most claims start with a referral from either your NHS GP or a GP service provided by the insurer. You’ll need to check that the treatment they’re referring you for is part of your cover. 

Once the treatment gets approved, you can pick the specialist your GP suggested. Or, you can pick who you want to see and book an appointment.

Who pays the bill?

Insurance companies often pay the specialist directly. This means you won’t need to pay up front for treatment.

Sometimes though, you may need to pay for the treatment first and claim the cost back later. This is often the case with dental check-ups or sight tests.

Paying your excess

An excess is an amount that you pay toward your medical treatment. You pay it before your insurance picks up the rest of the cost. You choose this amount when you set up your plan.

You’ll need to pay the excess up front unless your insurer agrees to bill you for it later. Check with your insurance company how they expect payment to be made.

You only pay the excess when you make a claim. Some insurers expect you to pay an excess each time you make a new claim. Others only expect you to pay it once a year, even if you make several claims. If your treatment carries on past your renewal date, you may need to pay another excess.

Reducing your premiums

If you’re concerned about the cost of private health insurance, there are ways to save money.

  • Find a comprehensive core plan, so you don’t need to pay for additional cover.
  • Increasing your excess should lower your premium.
  • Shop around and compare policies from several providers.

Vitality private health insurance

Want to know more about health insurance or thinking about taking out a policy? Here are some of the benefits of taking out health insurance with Vitality:

  • See a private GP within 48 hours 
  • Avoid lengthy hospital waiting lists 
  • Get specialist drugs and treatments 
  • See a consultant fast 
  • Refer yourself for physiotherapy 
  • Get mental support fast and without a GP referral
  • Discounts from top brands. And rewards for getting healthy.
Get your health insurance quote today
Published: 14 June 2024

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