Definition of a health insurance premium
A health insurance premium is the amount you pay to your provider in exchange for the policy that covers you for medical needs. This may be by either a monthly or annual amount.
The premium covers the costs your provider may have to pay for hospital appointments, prescriptions, medical tests, admin, etc. Your premium is paid directly to your provider, so if you use a health insurance broker to find your policy, it’s important to know they won’t receive the premium payments.
What impacts the cost of a health insurance premium?
The cost of your health insurance premium varies depending on several factors unique to you and based on the industry. Some of the factors that get taken into account are as follows:
- Age - As you age, the cost of your premiums may increase. This is because older individuals are more likely to require medical treatment and, therefore, more likely to claim and receive treatment from their policy.
- Health status - If you have pre-existing medical conditions, such as diabetes or heart disease, your premium may be charged at a higher rate due to the increased risk. Your insurer will not cover pre-existing conditions, but a history of medical issues will still be considered.
- Lifestyle - Your lifestyle also plays a role in your premium payments, such as whether you’re a smoker, your weight, how much alcohol you consume and more. Certain lifestyle choices increase your risk of health conditions, which presents a risk to your provider.
- Coverage level - Many providers offer policies at different levels, ranging from basic to more comprehensive cover. Policies with higher coverage levels will require higher premiums due to the increased access to medical services included within your plan.
- Excess - If you make a claim on your policy, there may be an excess amount you need to pay as a separate cost. If you opt for a higher excess amount, your premiums will reduce, and vice versa if you reduce the excess amount.
- Location - Where you live and access medical treatments may affect how much you pay. Locations with higher healthcare costs, such as London, may be more expensive due to the higher costs to providers to offer their services in these areas.
- Family history - Providers may look into your family history when assessing your risk to claim. If your family has a history of certain medical conditions, they may apply a higher premium to cover the higher likelihood of you contracting a similar condition.
- Occupation - Your occupation may also affect the cost of your health insurance premiums. If your job is particularly dangerous, such as working with toxins, or is physically demanding and likely to cause you injury, your provider may charge you a higher premium.
- Provider - There are many health insurance providers to choose from in the UK, each offering unique policies and working in varying ways. You may find that two very similar policies are priced differently between providers, which is why we always we recommend you compare your options.
Can you reduce your health insurance premiums?
There are ways to reduce your health premiums, but they may reduce your coverage level or result in you purchasing policies specifically designed to keep costs down. If these policies still offer what you need, they can be a great solution for individuals and families. Here are some of the ways to reduce your premium:
- Compare your options across providers - One of the most effective and easiest ways to reduce your premium is to compare policies across providers. Different insurers offer different rates, policies and coverage options, and we highly recommend that you go through this process. This is a service that we offer for free and only requires you to provide some basic information to get started.
- Increase your excess - As mentioned earlier, a higher excess amount will reduce your premium payments. You just need to consider whether you can afford a higher one-off cost in the event of making a claim compared to paying more by spreading the cost over monthly periods.
- Maintain a healthy lifestyle - Living a healthy lifestyle may help to reduce your premiums due to the lower risks of you becoming unwell. Some providers, such as Vitality, will also offer discounts and rewards for logging your activity.
- Use an independent health insurance broker - Independent brokers work with a range of providers and have access to many different policies. They’ll aim to help you find a policy tailored to your needs and can negotiate cover on your behalf.
- Guided health insurance - Some providers offer a guided option which allows them to choose which consultants treat you, and which hospitals you can be treated at. This offers some direct cost savings to your provider, which they pass on to you in the form of lower premiums.
- Group policies - Purchasing a group policy, such as couples or family health insurance, may provide savings. The cost of covering multiple individuals under a single policy may be less compared to each individual taking out a personal policy.
Do health insurance premiums rise every year?
Health insurance premiums may rise yearly due to your age, the cost of private medical treatment rising, facilities becoming more expensive and other external factors. This means that you may see higher premiums each year when it comes to renewing your policy. However, to make sure you’re not paying more than you need to, we recommend that you compare your options at the end of each policy in case a better deal is available from another provider.
Find out how much your health insurance premium would be
If you’re interested in understanding how much your premium may be for health insurance, our free comparison service will help you to understand the options available on the UK market.
We’ll get to know your needs so that any quotes you receive are in-line with the policy you would eventually purchase. We’ll also take factors such as provider benefits, whether you’re an individual or a family, and your personal circumstances into account, with the aim of finding you the most competitively priced policy.
To find out how much your health insurance premium would be, please complete the contact form below, and a member of our team will be happy to help you.
