What is a private medical insurance excess?
To save money on your health insurance policy, you can opt to pay a certain amount towards your medical bills. Excess amounts can range from £0 – £5,000 depending on the insurer and policy. Alternatively, you can choose not to have any excess on your policy, this may increase your monthly premium, but it means that you do not have to pay anything at point of claim.
Some providers such as WPA offer something called “shared responsibility” instead of a traditional excess. A shared responsibility is where the client agrees to pay a %, usually 25%, of any claim up to a maximum annual figure.
“David has a shared responsibility of £500 and a 25% agreement, his policy starts on the first January each year. In February he has a need to see a consultant who charges £750 for an ultra sound and 2 consultations. As a result David has to pay 25% of the £750 bill, meaning his contribution is £187.50. That means that he has a further £312.50 to pay should a second claim arise later that policy year.”
How does an excess work?
When applying for your policy you will have the option to add an excess to your policy. Its important that you choose an excess that you can afford to pay should you need to make a claim.
The excess may be required to be paid per claim or on the first claim only in any policy year. This information can be found on your policy documents and in the terms and conditions of your policy.
When you decide to make a claim on your policy you will need to contact your insurer. Once your treatment has been completed your medical bill will be split into what is covered by your medical insurance policy and the remainder you must pay yourself. The remainder will include your excess and any amount that exceeds the cover limit of your policy.
When is it right to add an excess to my policy?
You generally are offered the option to make changes to your plan at each renewal. For example if your premium has gone up at renewal adding an excess of as little as £200 can reduce your policy by as much as 10%.
You may with some insurers be able to add an excess mid-term. If you are having to justify the monthly premium you are paying, it may be worth having a review done to see if there is any other way of bringing the premium down before putting an excess on your plan. As it may create a barrier to claiming on the plan.