If you’re reading this post, you’re probably already aware of the many benefits of private health insurance, not least quick access to private treatment when you need it. However, one of the most significant disadvantages, especially for those approaching retirement and beyond, is that premiums rise sharply as you age. Read on to learn about the best ways to reduce the cost of your policy.
1. Review your policy annually
The first suggestion we make is to review your policy regularly, every year if possible. With the cost of policies increasing by an average of 44% between your 50th and 60th birthdays, and then another 59% between your 60s and 70s, the single most important thing you can do is shop regularly.
Indeed, the FCA themselves recommend that this be an annual exercise, as do Martin Lewis’ team at Money Saving Expert. While staying with your current insurer is often the easiest option, it’s usually not the most wallet-friendly.
Health insurance in the UK is a competitive market and all top health insurers often run incentives to attract new customers. By comparing the market, you ensure that you always have the best policy for the best price available.
2. Bargain with your existing service provider
Often your insurer’s initial renewal price is not the best they can do. If you don’t haggle, you’re missing out on an opportunity to save money. If this becomes a recurring theme and you never question the price, the increases will increase year after year.
To give you the best basis for bargaining with your insurer, it’s useful to get a comparison quote first so you can tell them the price you’d get elsewhere if you switched.
3. Increase your surplus
The next option to reduce the cost of your policy without significantly affecting your coverage is to increase the amount you are willing to pay for treatment. Increasing your excess minimizes the risk to your insurer and therefore the cost of the policy.
4. Remove additional options from the rule
When we’re all a bit younger, we tend to choose most of the additional options offered by a health insurance policy. So, for example, routine dental cover, mental health cover and even travel cover. However, as you age, each of these options increases the total cost of your policy. If you primarily have health insurance that protects you against serious medical conditions, you may want to remove some additional options to lower your renewal premiums.
5. Opt for a policy with “guided consultants”
A relatively new concept of health insurance in the UK is called ‘guided consultants’. You agree to use a set of consultants pre-selected by your insurer in exchange for a reduction in your premiums. We recently researched the cost of health insurance in the UK and found that choosing a consultant-led policy reduces your premium by 20% on average.
Of course, you need to remember that you are effectively reducing your cover as you will not be able to access all the specialists and consultants in the UK. However, if your policy is getting expensive and you need to find other ways to keep costs down without sacrificing too much coverage, it could be a good option.
6. Review your hospital list
The hospital list you choose on your policy significantly affects the cost. If, for example, you have central London hospitals included but don’t see yourself ever needing to use them, switching to a national hospital list or even a local one could be a great way to save some extra money.
7. Reduce or eliminate your outpatient coverage
Outpatient insurance significantly increases the cost of your health insurance policy, not least because it brings significant benefits. The thing with outpatient cover is that you are far more likely to be looking for diagnostic tests, scans and physiotherapy than serious medical treatment where hospital admission is required. Therefore, unlimited coverage for outpatient treatment is expensive.
The first option is to reduce the amount of coverage you have, which will only reduce the cost of your policy. In a worst-case scenario, and if you want to be covered for the most serious conditions but can’t afford a policy, removing outpatient insurance altogether could be an option. Again, this is something to consider carefully and discuss with your health insurance broker when you get a comparison quote, as this will reduce your coverage.
8. Add a 6 week NHS waiting option
The last suggestion we have is to add a 6 week NHS waiting option to your policy. This is not something we recommend too often. Having it tends to undermine a significant number of health insurance benefits. However, it is a good way to reduce the cost of the policy. By adding the NHS 6 week waiting option, you commit to going that route if the NHS can treat you within 6 weeks; however, if it lasts longer than that, you will be treated privately.
Waiver: This information is general and what is best for you will depend on your personal circumstances. Talk to a financial advisor or do your own research before making a decision.
