How your Health Insurance Excess works

An excess is a common option to consider when looking to purchase a Private Medical Insurance  policy. It can also be used as a way for you to save money at the renewal of your policy. Excesses range from as little as £100 to as high as £5,000 and there are many options to choose from. Your Health Insurance excess is the amount you agree to pay when you make a claim.

The common excess type is per person per year however it can be offered per person per claim. It is important that you know which type of excess you have in place.

If you have a policy in place with a £100 excess, you can look to increase this to a higher value at the renewal of your policy as a way to save money. The higher the excess you have, the lower your annual premium will become.

Voluntary or Compulsory Health Insurance Excess?

Some individual health insurance plans already incorporate a compulsory excess, which is normally set at £100. To reduce costs further where a compulsory excess applies you can consider selecting a voluntary excess.

If you add a voluntary excess and your policy incorporates a compulsory excess, your voluntary excess will be added to your compulsory excess. This will give you the total excess you would pay out in the event of a claim.

For example:  If you choose a voluntary excess of £250 and a compulsory excess of £100 applies, the total excess you’d pay if you had to claim would be £350. It is important that you choose an excess that you know you can afford.

Excess and your out-patient limit

If your first claim on your policy is for out-patient treatment and you have selected a reduced out-patient benefit limit, some insurers can deduct the excess amount paid from your out-patient limit before the insurers pay for any monies they owe towards the claim. Depending on your excess this could leave you with very little cover for future out-patient claims for the remainder of that policy year.

For example, if you have a £250 excess and a reduced out-patient limit of £500 and your out-patient consultation and diagnostic tests total £350, you would be liable for your excess amount towards the total of that claim (£250), but at the same time the insurer would reduce your £500 reduced out-patient limit by your excess amount, reducing your out-patient limit to £250.

Once this has been done they will then deduct the £100 they owe from your out-patient limit which would leave your out-patient limit with only £150 for the rest of the policy year. You wouldn’t have to worry about this example if you select full cover for out-patient treatment.

What is a Status Linked Excess?

If you have a policy with Vitality Health, you will have the option of a status linked excess. This means that your Health Insurance excess is directly linked to your Vitality Status. Your Vitality status is based on your health and lifestyle choices. Essentially you are rewarded for living a healthier lifestyle. On this basis you could end up with a zero excess to pay. Vitality will reward you for increasing your Vitality status in many ways. A reduction in your Health Insurance excess when you status link it is just one of the benefits available to you if you achieve a higher Vitality Status.

Private Medical Insurance is flexible and can be tailored to suit your specific needs and budget. You do not have to have a Health Insurance Excess included at all. There are other ways you can lower your health insurance costs and we would be more than happy to discuss these options with you. We want you to know what options are available to you before you buy a policy.

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