Guide
Health insurance excess explained
If you’re confused about how your health insurance excess works – let us explain. It's important to have a clear understanding about what to expect when you pay your excess. That way you won’t be hit with any surprise costs. In this guide we take you through what a health insurance excess is, how it works and when you pay it.
What is health insurance excess?
An excess is an amount you pay towards your medical treatment before your insurance company starts paying the rest of the cost. So, if your treatment costs £4,000 and you have an excess of £500, you’ll pay £500 when you have the treatment. Your insurer will pay the rest of the cost.
When you set up your plan, you’ll be asked if you want to pay an excess. At Vitality, you can set an excess of zero up to £1,000. The bigger your excess, the lower your premiums. It can help to keep your premiums affordable.
How does health insurance excess work?
You’ll only need to pay an excess when you make an eligible claim on your private health insurance. There are a couple of different ways the excess can be applied. And they can make quite a difference to the amount you pay. So, it makes sense to understand how each type works.
There are two main types of excess – excess per person per plan year and excess per claim. And you can also choose not to pay an excess at all.
Types of health insurance excess
Excess per person per plan year
With this type of excess, you pay it once in a plan year, even if you make several claims. A plan year is 12 months from when your plan starts. So, if your plan begins on 1 June, your plan year is 1 June to 31 May. Let’s take a look at what you could expect to pay if you had this type of excess.
Rebecca and her partner Sam have an excess of £500 on their couples’ health insurance. Their plan year runs from 1 February to 31 January.
- Rebecca makes a claim in November and is told her treatment will cost £5,000. She pays her £500 excess and Vitality pay the balance of £4,500.
- In December, Sam makes a claim. He’s told his treatment will cost £1,000. He pays his £500 excess and Vitality pay the balance of £500.
- In February the following year, Sam needs to claim again. Because the plan year has renewed, Sam needs to pay another excess of £500.
- Three months later, Sam makes a further claim. But because he’s already paid his excess in this plan year, Vitality pick up the full cost of his treatment.
If your excess is greater than the cost of your treatment, it’s still important to make a claim through your insurer. This is because any excess paid will be offset against the cost of future claims.
For example, Rebecca has an excess of £500. She’s told her treatment will cost £300. She pays for the full cost of her treatment with her excess. If later in the plan year she needs more treatment, she’ll only need to pay £200 towards that treatment before Vitality pick up the rest of the cost.
Excess per claim
With this type of excess, you pay it each time you make a separate claim. Let’s look at Rebecca again.
- Rebecca makes a claim and is told her treatment will cost £5,000. She pays her £500 excess and Vitality pay the balance of £4,500.
- Rebecca’s claim goes on for more than 12 months. At this point, Rebecca needs to pay a further £500 excess as it’s now considered to be a new claim.
- Six months after her original claim, Rebecca needs to claim again for a different condition. She pays the £500 excess and Vitality pick up the rest of the cost.
No excess
If you opt for no excess on your plan, you won't need to pay out anything upfront when you make a claim. Your insurer will cover the full cost of your treatment – up to any limits on your plan.
The impact of excess on premiums
Generally speaking, choosing an excess should lower your monthly premium. This is because you’re choosing to pay towards the cost of any treatment you need. Therefore, the insurer doesn’t need to cover the whole cost of the treatment.
It’s very important that you choose an excess that you can afford to pay. Especially if you’ve chosen to pay an excess each time you make a claim. You’ll be expected to pay the excess when the claim is accepted and before you start treatment.
The level of excess you choose can make a significant difference to your monthly premium. Especially as you get older.
Read our guide about the cost of private health insurance for more information.
Excess options and limits
Health insurance companies will usually offer several levels of excess to choose from. At Vitality, you can choose from no excess, £100, £250, £500 and £1,000.
With Vitality individual health insurance plan, you won’t need to pay an excess if you’re:
- claiming NHS hospital cash benefit
- having optical, dental or hearing treatment
- claiming childbirth cash benefit.
Paying your health insurance excess
When you want to make a claim, contact your insurer who will let you know whether your condition is covered by your insurance. If it is, they’ll arrange treatment for you. At this point you’ll need to pay your excess.
You may need to pay the excess directly to the practitioner or hospital where you’re having your treatment. Your insurer will tell you who this is and how to make the payment. Otherwise, you make your payment to the insurer who will then settle the bill.
Choosing the right excess for you
You’ll probably have to pay your excess pretty quickly after you’ve had your claim agreed. So be sure you choose an amount that you can easily afford at short notice.
It’s tempting to have a large excess to reduce your monthly premium, but if you need to make multiple claims, this could add up.
Consider your financial situation, general health and the risk of not being able to pay your excess. Also, think carefully whether you want to pay out your excess just once in a plan year, or at each claim.
If you’re not happy with your excess, you can usually make changes to it when your policy renews.
Vitality private health insurance
Want to know more about private health insurance or thinking about taking out a policy? Here are some of the benefits of taking out health insurance with Vitality:
- Video GP appointment 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
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Get menopause support
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Discounts from top brands. And rewards for getting healthy.
Health insurance excess FAQ
Is a health insurance excess required?
No, you don’t need to take out an excess on your health insurance. If you do though, it can make your premiums cheaper.
How much is a health insurance excess?
You can choose how much you want your excess to be. At Vitality, you can choose from no excess, £100, £250, £500 and £1,000.
Can I change my excess amount during the policy year?
Your premiums for the year will be based on the information you selected when you took out the plan or at renewal. You can usually make changes to your excess at renewal, but not during the policy year.
What happens when I change my excess?
Relevant guides and articles
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