Private health insurance can help you access medical treatment and a range of other therapies as and when you need them. But as you age, policy premiums are likely to rise, making it an increasingly expensive option. Here we summarize why premiums rise with age and offer some practical advice to help keep private health insurance affordable.
Why does health insurance increase as you get older?
Unfortunately, as we age, we are more likely to experience a range of health conditions including arthritis, osteoporosis (brittle bones), diabetes, hearing loss and deteriorating eye health. Frailty is also a significant risk, with 30% of 65-year-olds experiencing a fall at least once a year. About 5% of falls result in a fracture and require hospital treatment.
With this in mind, the older we are, the more likely we are to make a claim on our health insurance policies, which is reflected in the higher cost of premiums.
But while we can expect premium increases, this shouldn’t mean you’ll be excluded from private health insurance – here’s what you can do to keep your policy affordable:
1. Compare plans
As with almost all types of insurance, you should compare policies each time your current plan comes up for renewal. Even if you are generally happy with the coverage you have, there may be newer packages that include a wider range of treatments.
The only exception is if you have previously had medical conditions that are covered by your current policy or will soon be covered because the moratorium period is coming to an end.
Moratorium periods are periods when certain (usually pre-existing) conditions are excluded; they usually last two years. If you have been symptom-free during this period, your insurer will normally reinstate cover. But taking out a policy with another insurer could mean you have to start a new moratorium period and wait even longer for the pre-existing condition to be covered.
2. Bargain with your insurer
Haggling may not be something you’re comfortable with, but talking directly with health insurance providers can help you cut money off your premium.
A good way to approach this is to compare policies beforehand and find a similar but cheaper plan. This gives you and the insurer a benchmark and lets them know that you actually have an alternative option. More often than not, they will lower their premium a bit. Ultimately, the worst that can happen is that they say no, so don’t be afraid to bargain.
If you want to renew your premium but cannot afford it, inform your health insurer. If you’ve been insured for a while, they might offer you a deal to keep your custom.
3. Find a broker
If you really can’t stomach the idea of haggling, you can hire an insurance broker instead.
A broker will discuss what you want in a plan and search the market on your behalf. They will also be able to walk you through specific features and explain any terms and conditions so you can choose a policy that gives you good value for money.
4. Increase your surplus
The excess is the amount of money you pay for the claim. For example, if you make a claim worth £700 and your excess is £200, you will pay £200 and your insurer will cover the remaining £500.
Increasing the excess reduces your overall premium, making your policy more affordable. On the other hand, this means you’ll pay more when you file a claim.
If you decide to increase your excess, remember to make it affordable as you won’t be able to proceed with your claim if you don’t pay it.
5. Pay for annual health insurance
Some insurers will offer you a discount if you pay the premium annually rather than in monthly instalments. Discounts will vary, but expect around 5%-6%.
If it’s not immediately clear whether you’ll get a discount for your annual payment, talk to your insurer directly. In most cases, you will be pleasantly surprised.
6. Make a no claim bonus
Some health insurers will offer you a no-claims bonus. This means that you will receive a renewal discount as long as you have not applied (discounts vary by insurer).
However, creating a no-claims bonus doesn’t mean you should avoid seeking treatment. Instead, weigh the cost of treatment against your excess to see if it’s worth it to claim or pay for treatment yourself.
7. Select the guided consultant option
You may be given the option of a guided list of consultants, which means your health insurance will give you a shortlist of consultants to choose from. The list you receive will always reflect your condition and the treatment you need so you will be choosing from specialists in your field.
Some health insurance companies offer more choices than others, so the list of advisors with one provider might be extensive, while others might list two or three.
Guided lists of consultants can help reduce your premium by as much as 20% in some cases, so it’s an option worth considering if you have to stick to a budget.
An alternative (more expensive option) is an unlimited list of consultants where you can choose an expert yourself.
8. Limit the hospital network
Your health insurance provider will work with a network of hospitals – the more they work with, the more choices you have in terms of where you go for treatment. More choice, however, means more costs, so limiting the hospitals where you can be treated helps lower your premium.
Being selective about hospitals doesn’t mean discarding all your options, it may simply mean limiting your list to networks in your region (rather than being able to choose nationally). Realistically, this is a relatively easy way to save money on your premium as most people want to be treated close to home.
The amount you can save will depend on where you live and how much it costs to maintain and run a hospital in your area. Unfortunately, if you live in an area with a high cost of living (such as a big city or the South East of England), you are likely to pay more compared to someone in a less affluent area. However, if you can remove top hospitals (in central London, for example) you can still save money.
9. Avoid extras and fees you don’t need
Optional extras can give you greater access to a range of health and wellness services, but they also increase the amount you pay. To keep your premium low, stick to the core or basic coverage you need and avoid adding features such as co-pays for dental, vision and hearing care.
While these features can help cover some of the cost of glasses, contact lenses or hearing aids, if you’re unlikely to ask for it, it’s probably not worth the extra premium increase.
10. Keep the NHS treatment option
Health insurers usually offer a ‘six week waiting’ option which can help reduce your premium. This means that if the NHS can treat you within six weeks, you will receive treatment from them. If this is not possible, then you could access treatment privately.
11. Limit outpatient treatment
This generally refers to treatment that does not require an overnight stay in hospital. It may include diagnostic tests, consultations and minor surgeries.
Health insurance packages usually offer different ways to limit your outpatient options. For example, this may mean having any diagnostic tests done through the NHS or limiting the number of private counseling appointments you can have.
Alternatively, some insurers limit outpatient treatment by value. For example, you’ll be able to access up to £1,500 worth of treatments privately, but if you need anything more, you’ll have to pay for it yourself or be treated on the NHS.
12. Maintain good health
When health insurance providers calculate your premium, they will take into account a number of factors, including your overall health.
An unhealthy lifestyle (drinking too much alcohol, being overweight and not exercising) can increase the amount you pay because you are more at risk of getting sick and making a claim.
Conversely, maintaining a healthy lifestyle (and in turn good health) can help lower your premium. Some insurers also offer incentives to help you stay fit and active with gym discounts.
13. Stop smoking
If you smoke, it can mean you pay as much as 50% more for health insurance compared to a non-smoker. This is simply because smoking increases your risk of becoming seriously ill.
According to the NHS, not only does smoking cause 70% of lung cancer cases, it also increases the risk of other types of cancer. Smoking also increases the likelihood of coronary heart disease, heart attack or stroke.
So while quitting smoking is easier said than done, it can really help lower your health insurance premiums (and really improve your health in the long run).
14. Add family members
If you are part of a couple, adding a partner to your policy can reduce the amount you both pay in total. You can usually expect to pay less for a joint policy compared to having an individual policy.
Is it worth getting private health insurance for the over 65s?
Whether private health insurance is right for you depends on your circumstances, regardless of age.
Before you start your search, think about the type of cover you want, followed by the ‘nice to haves’. Having a clear list can help you keep a better eye on the type of policy you need and prevent you from getting distracted by optional extras that increase your premium.
Private health insurance should provide you with clear benefits that allow you to manage your health and feel in control of your options; pros and cons include:
What are the alternatives to private health insurance?
If you don’t want to rely entirely on the NHS, but want to consider other private health insurance options, you can insure yourself instead. This would mean setting money aside to build up your own health insurance fund (for example, in an ISA or high-interest savings account).
Keep in mind that self-insuring usually means saving up some time or having enough funds to get started. Thanks to the NHS, few of us realize how much common medical procedures cost, for example (average costs based on our research):
- Knee replacement, £14,449
- Hip replacement, £13,402
- Hysterectomy, £8,014
- Gallbladder removal, £6,620
- Tonsillectomy, £3,084
How to choose private health insurance for people over 65?
When comparing policies, be clear about what is covered and what is not. Remember to consider any specific restrictions or conditions that also affect your eligibility for treatment.
Moreover, don’t feel rushed or pressured into making a decision as soon as you get an offer. If you buy a policy, you have at least 14 days to change your mind (this is the minimum by law, some providers will offer you more time). You should get a refund minus the amount for the days the rule was active).
If you would prefer to speak to an expert, please contact us and we can put you in touch with a regulated broker. They will be able to discuss your needs and help you go through all the available options, including looking for ways to keep premiums affordable.
