How to choose health insurance

Health insurance will pay for you to have treatment in a private hospital if you are unwell or injured, but comprehensive cover can be expensive.

Do you need health insurance?

Health insurance can pay for private treatment of medical conditions and injuries you would usually have to pay for because:

• Your treatment is not available on the NHS

• You want the treatment immediately (without joining an NHS waiting list)

• You want the extra comfort of a private hospital

You can usually arrange to have consultations and treatments at a private hospital local to you and at a time that is convenient.

However, it is also important to understand the limitations of health insurance. It doesn’t offer cover for emergency treatment and you normally won’t be covered for pre-existing and chronic conditions either. 

Is it worth it?

Private treatment is not usually worth it if you are happy with the treatment you can get on the NHS.

You can pay for private treatment directly, as and when needed. However, the cost of consultations, tests and surgery means costs can quickly mount. By paying a manageable insurance premium every month you can be sure that if you do need treatment the costs will be covered and you won’t face a big unexpected bill. The catch is that money is lost if you don’t need to claim.

Whether or not health insurance makes sense for you is a very personal decision and will often depend on your circumstances. While some people are happy to deal with the NHS, others will not be able to put a price on the peace of mind that fast access to private treatment can provide. Employed people with generous sick pay benefits for example, may have less need for it than self-employed individuals who won’t earn any money if they cannot work.

Cost is also an important consideration and it’s important to find a policy that provides the cover you need at a price you can afford.

What types can you get?

• Individual policies: These are taken out in just one person's name and can only pay out for treatment for that person.

• Joint policies: You can cover two people on the same policy, e.g. yourself and your partner. This could be cheaper than getting separate health insurance policies (but it is worth checking if getting separate policies works out cheaper).

• Family policies: These let you cover yourself, your partner and your children on one policy. You can pay to cover the whole family with one monthly premium instead of paying for everyone separately.

• Children's policies: You can either get a standalone policy for your child or add cover for your children to your own health insurance.

Full or moratorium underwriting

• Fully underwritten policies can pay out in more circumstances but are usually more expensive and take longer to apply for.

• Moratorium policies are usually cheaper, faster to apply for and more likely to accept you if you have pre-existing conditions. But they can pay out in fewer circumstances.

If you choose fully underwritten health insurance, you have to give your full medical history.

You do this by filling out a medical declaration when you apply. The insurer may also ask for a doctor's letter or report to confirm your medical history.

If you get a policy with moratorium underwriting instead, you do not need to give information about your medical history.

But it will not pay out for treatment for any pre-existing conditions. This usually means any you have had in the past five years.

How to cut the cost of health insurance

A comprehensive policy that covers a wide range of treatments might sound great but they may  not always offer the best value for money.

Some "pick and mix" policies let you add exactly the cover you need and set a price based on which options you choose. This can be the cheapest way to get the right level of cover. 

For example, you could choose a policy that covers hospital stays, diagnoses and surgery but not physiotherapy, dental costs or homeopathic therapies.

How to choose the right  policy for you

Work out:

• What illnesses and injuries you want to cover, e.g. cancer

• What types of treatment you want to cover, e.g. physiotherapy, psychiatric or dental treatment

• Whether you would be prepared to use the NHS - you can cut the cost of cover by choosing a plan that only pays for private treatment if the NHS wait is above a certain limit, for example six weeks. Other plans pay a cash benefit if you decide to have treatment in an NHS hospital instead.

You can then find policies using our health insurance comparison, which shows a range of providers and what their policies offer.

You could also get health insurance quotes from a broker by either entering your details online or talking to them by phone.

You can then compare the quotes to find the best policy by checking:

• They offer all the cover you need

• The cost of the premium (usually paid monthly)

• The excess you have to pay if you claim

• Any limits on how much or how often you can claim

• If there is a qualifying period (i.e. how long you have to wait until you can make a claim)

Consider the alternatives

Instead of health insurance, you could get:

• Free treatment on the NHS, which covers most types of illness or injury.

• Healthcare cash plans, which you pay into monthly. You can claim back for the cost of some everyday healthcare expenses (for example dental treatment, physiotherapy and trips to the opticians) after you have paid the bill yourself.

• You can pay as you go for private medical treatment. If you have money in savings you can earmark it for future healthcare costs and use it to pay for private treatment if NHS treatment isn’t an option or waiting lists are long.

Although it is not designed to pay for medical care, critical illness cover is a type of insurance that pays out if you develop any of the serious illnesses the policy covers, for example heart disease, cancer or stroke.