How health insurance excess works

When you apply for health insurance, you’ll usually need to choose an excess amount. This amount will have an impact on your premium and help decide how much discount you get.

So, what exactly is an excess, and how does it work when you make a claim on your policy? 

It’s the amount you agree to pay towards your treatment if you make a claim on your health insurance policy. You can choose the amount that’s right for you when you first apply for cover, or when the policy’s due for renewal.

So, say you agree to a £500 excess and have a procedure covered by your policy that costs £3,000 – and it’s your first claim that policy year. When it comes to paying the bill, you’ll pay £500, and your insurer will pay the remaining £2,500.

Choosing to pay a higher excess when you make a claim will generally lower the cost of your cover. Just make sure you choose an excess amount you could afford to pay at short notice. 

Make sure you read the policy terms, too. Not every health insurance policy offers the same excess amounts or terms, and you’ll need to know what happens when it comes to paying the claim bill. 

How much excess you’ll pay depends on your insurer. For example, you can choose from £100, £200, £500, £1,000, £3,000 and £5,000 with our Healthier Solutions policy.

If you’re not sure how each policy excess would impact your premium, you could try a few options when you get a quote.

You only need to pay the excess if you make a claim. Some policies have a cap on what you pay – so you pay an excess only once each policy year, regardless of how many claims you make. Others charge an excess every time you make a claim, so it’s worth keeping that in mind when you’re choosing insurance.

With our health insurance, you only pay one excess amount for each person on the policy, every policy year, on the first claim. Just bear in mind that, if your treatment starts in one policy year and continues into the next, the policy excess would need to be paid again for that claim. So, if your policy renews in April and you make a claim in March, and your treatment is ongoing, you might pay an excess twice.

Yes, you can change your policy excess amount at each annual policy renewal. 

So you could choose a higher excess, to help reduce your monthly premium, or a lower excess, to pay less on your first claim. Or you could opt to agree an excess if you didn’t have one before.

If you have an excess on your policy and make a claim on a benefit where the excess applies, you’ll need to settle this amount with the hospital or specialist, or whoever provided your approved treatment. Your insurer will explain how to do this when you make the claim. The excess is applied on the date the treatment takes place, rather than the date the bill is paid.

The rest will be covered by your insurer, unless the bill is for outpatient treatment and you chose a reduced outpatient limit. With our cover, you can reduce your outpatient cover to a limit of £0, £500 or £1,000, to lower your premium.

These examples help to explain how it works if you have a health insurance policy with us:

• If you have a £200 excess, and your treatment bill is £10,000: you’d pay £200 to the hospital or treatment provider, and we’d pay £9,800. If the treatment continued into the next policy year, another excess would apply, so you’d pay £200 towards your first treatment bill in the new policy year
• If the treatment you’re claiming for costs £1,000 and your excess is £1,000: you’d meet the full cost of that treatment yourself. But there’d be no excess to pay if you make another claim in that the same policy year
• If you have a £200 excess, and your treatment costs £150: you’d need to settle the full £150 amount with your treatment provider. If you have follow-up treatment totalling £100, you’d settle the first £50 and we’d pay the difference 
• If you claim for something that has a monetary limit: for certain treatments, there are limits on how much we’ll cover – but the excess you pay doesn’t count towards that limit. For example, if your excess was £200, and the treatment you are claiming for has a monetary limit of £500, you would pay the first £200 and we would pay up to a further £500 for that treatment.

If you don’t make a claim because the treatment you have costs less than your excess amount, your no claim discount won’t be affected. 

This depends on your cover. However, with our health insurance, you won’t need to pay an excess if you make a claim for any of these benefits:

• NHS cash benefit: if you use the NHS for in-patient treatment, instead of making a claim for private treatment, we’ll pay you £100 for each night you’re in hospital, for up to 30 nights
• NHS cancer cash benefit: we'll pay you £100 for each day you receive cancer treatment as an in-patient or day-patient as an NHS patient
• Cancer treatment wigs benefit: we’ll pay towards the cost of a wig due to hair loss caused by cancer treatment
• Donations we make to a hospice: we’ll pay a maximum of £70 a day, for up to 10 days, if you have hospice care
• Baby bonus: we’ll give you £100 for each baby born or adopted in their first year

Try to be realistic about what you can afford to pay if you, or another person covered on your policy, needed to make a claim. 

It’s natural to want to make your premium as low as possible by choosing a higher excess amount. But you can’t predict your future health, and you may need to be ready and able to pay your contribution towards your treatment at relatively short notice. 

Remember that you can always adjust your excess amount when it comes to policy renewal time.