Cost Containment options – the application of an excess


Private Medical Insurance premiums can be controlled by the application of an excess to your policy either per person per year or per person per claim. Most private medical insurance providers in the UK market offer the per year option only as it is believed to be the fairest option.

What happens when you add an excess?

When you add an excess to your policy you are in effect agreeing to pay the first part of the claim and the higher the level of excess you choose, the bigger effect it will have on your premium reduction. Most people would have experience of how this works as the excess principle is used on many general insurance products such as home and motor insurance policies.

If you know that you can afford to pay the first £500 towards any claim then adding a £500 excess will make a significant difference to your private medical insurance premium.

Is there a “standard” excess level?

There is not a standard level of excess however, some individual policies have a mandatory excess of £100. You can then opt to add an additional voluntary excess to reduce the premiums further.

Cover for your excess?

If you are part of a company scheme then your employers may have chosen to implement a Cash Plan or Excess and Shortfall Insurance which will cover the cost of your private medical insurance excess. Both Cash Plans and Excess and Shortfall Insurance policies provide a low cost option to ensure that no-one is out of pocket when it comes to paying a private medical insurance policy excess.

Co-payment or excess?

There are some providers who will offer you a policy with a “co-payment” rather than “excess”. If you take a private medical insurance policy with a co-payment option this will result in you paying a pre-agreed percentage of any claim that is made.

If you are looking for ways of reducing the premium paid for your health insurance then speaking to a specialist health insurance broker could help you in making the right choice for your own specific circumstances. Adding an excess to your policy is just one of the many options available.

Please visit the Medigest Business Directory to find details of a specialist health insurance broker who can assist you.


SMP Healthcare