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What Affects Health Insurance Premiums?

  • Sep 05, 2019
  • Health Insurance

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Are you considering private healthcare and want to understand the factors that make up the UK private health insurance cost? Health insurance, also known as private medical insurance (PMI), covers the cost of private medical treatment for ‘acute conditions’ that start after your policy begins.

It works in a similar way to any other insurance – you pay monthly or annual fees, and your insurer pays out for all or some of the cost of the eligible private medical treatment you receive.

Whilst  insurers will determine the costs of their health insurance premiums in different ways, generally factors that affect the cost of UK private health insurance includes:

  1. Your age
  2. Your postcode
  3. Your current and pre-existing medical conditions
  4. Your chosen benefits
  5. Payment frequency
  6. Who is added to your health insurance plan
  7. Your claims history
  8. Inflation

Whether you’re looking for individual health insurance or private medical insurance cover for your family, these factors can impact the cost of your policy. Now, let’s look at them in more detail…

Top 8 factors that affect the cost of your health insurance

1. Your age

Your age is an important factor in determining your health insurance premium because your medical needs are usually dependent on your age. The older you are, the more likely you are to need medical services, as your risk of developing health complications and illness is increased; therefore, your premiums will usually be higher than for a younger person.

It is possible to get private health insurance if you are over 70 years old from some insurers, but your options will be more limited than they are for younger age groups and your plan will be more expensive due to the increased health risks of your age.

To join Freedom Health Insurance, you must be 18 or over and not older than 70.

2. Your postcode

Many private health insurance providers base their prices on postcode. Health insurance tends to cost more in London and other major cities. This is because these prices are directly influenced by the cost of medical treatment in that particular location (i.e. private hospitals in London tend to be more expensive than in other places).

At Freedom Health Insurance we recognise that you are not your location and you are free to move wherever and whenever you like without this affecting your existing policy. 
We don’t charge our customers differently based on location. If you live in a major city like London, you won’t pay more than someone who lives in Wales, for example. Equally, if you got a policy with us while living in a location with lower medical costs and decided to later move to London, we wouldn’t charge you extra.

3. Your current and pre-existing medical conditions

To give you the most accurate quote for your health insurance, we might collect information about your pre-existing and ongoing medical conditions.

When applying for private health insurance, any pre-existing and chronic medical conditions could potentially not be covered by your policy.

A pre-existing condition is a medical condition for which you have experienced symptoms, received medication, advice or treatment before your policy started. A pre-existing medical condition may be covered after a certain period of no symptoms, medication or treatment for that condition.

A chronic condition is persistent and long-lasting in its effects and, in most cases, cannot be cured but only kept under control through medication, diet or change of lifestyle. Chronic conditions will typically not be covered by an insurance plan, however acute episodes arising from these may be covered.

Buying private health insurance at a younger age ensures there is less scope for pre-existing medical conditions as you will be covered early, and any diseases diagnosed later will be covered automatically.

4. Your chosen health benefits

Like with any other type of insurance, the private medical insurance premium is directly influenced by the number of benefits you choose and their limit. The more benefits with a higher annual limit you have, the more likely it is for the cost to go up.

What does benefit mean in health insurance?

Benefits in health insurance refers to the services and types of healthcare that are covered under the private medical insurance plan. To find out the full list of what benefits you’re entitled to with your health insurance policy, check your policy guide and documents which will disclose the benefits and exclusions in your plan’s coverage.

5. Payment frequency

Like any other type of insurance policy, you’ll usually have the option of purchasing private health insurance as an annual premium or you could choose to pay on a monthly basis. By opting for monthly coverage, you’ll have more flexibility, however, paying for your health insurance policy on an annual basis is usually a cheaper option in the long run. 

Here at Freedom Health Insurance, we’ll give you a 6% discount if you choose to pay for your health insurance policy annually.

6. Who is added to your health insurance plan

Many people choose to add family members and partners to their health insurance plan and the number of people being covered as well as who is being added will be considered as part of your premium pricing. For example, you may wish to add a partner who is older than you, and as they’d be seen as more likely to require medical services, you could have a higher premium.

7. Your claims history

Whether you’ve made claims on your health insurance in the past can impact the cost of your premiums. For example, if you made a claim during your policy’s term, your premium could be higher. Alternatively, if you never made a claim, your premiums could be lower. Not all insurers will factor in your claims history but some may offer a ‘No Claim Discount’.

8. Inflation

Inflation refers to the increase of prices of goods and services over time. If there are changes in costs relating to medical care, this could be reflected in the price of your premiums (this is because it will cost more to cover medical treatments that policyholders may require).

Medical inflation can also impact your premiums. This refers to emerging trends and advances in medicine (such as new drugs) which lead to a better quality of medical care and treatments. As these procedures and treatments may be able to treat illnesses more quickly and effectively, this can increase the costs associated with them.

What causes health insurance premiums to increase?

Your health insurance premiums can increase if there are any changes to your personal circumstances and the above points mentioned. For example, if you changed address and moved to London, or if you entered an older age bracket, your health insurance benefits could cost more. If you’re unsure as to whether you’re likely to see any changes in the price of your policy or wish to know why the cost of your premiums have changed, you can always contact your private health insurer for further details.

What affects the cost of business health insurance? 

If you're a business owner who’s wondering what might impact the cost of group health insurance for your employees, factors that can affect the cost of premiums include:

  • The benefits included in the health insurance cover

  • The type of underwriting on your policy

  • The number of employees you wish to cover under your policy

If you would like to get a quote for our business health insurance policy, or wish to find out more information, please contact us.

How to reduce health insurance premiums

Now you know what can affect the price of your medical insurance premium, you may be wondering what you can do to keep the costs down. We’ve put together some tips below to help you get the health cover you need for a lower cost:

1. Do your research

When it comes to choosing the most budget-friendly premiums, it’s always worth doing your research. You can look into getting quotes from different insurers but do also bear in mind that the cheapest option you find won’t always be the right one for your and your personal needs.

2. Increase your excess

You can choose to increase your excess for when you do need to makle a claim. Essentially, higher excesses can lower the cost of premiums as you’re agreeing to pay out more yourself should you require private medical treatment and health care. 

3. Choose the right level of cover 

Determine which level of cover is best suited to your needs and what type of cover includes the health benefits which are most important to you.
Here at Freedom Health Insurance, we offer different levels of cover to suit all budgets. Our Freedom Essentials cover is our most affordable health insurance policy which keeps your premiums at a lower cost.

4. Consider whether you need optional health benefits

You may feel as though you don’t need all the optional benefits on offer alongside your private medical insurance policy, such as dental cover. Whilst you may not be able to make changes to these additional benefits part-way through your policy’s term, you can make amendments at the time of renewal to bring costs down.

5. Consider premium payments

By choosing to pay for your health insurance premiums on an annual basis versus monthly, they could be cheaper.

6. Only make claims when necessary

Before you make a claim, make sure it’s absolutely necessary, as claims can increase the cost of your premiums when it comes to renewing your policy (even if you’ve only made a small claim). To avoid making a claim, you may feel that you could get an adequate service from the NHS on medical treatment which isn’t urgent. Don’t forget, even if you take out a private health insurance policy, you’ll still be able to access NHS services.

Why choose Freedom Health Insurance?

Whether you’re looking into private health insurance for the first time or you’re thinking about switching to Freedom from your current health insurance plan, Freedom Health Insurance has a long track-record of success covering thousands of people in the UK and abroad since 2003. We provide flexible and comprehensive private medical insurance for individuals, families, and businesses across the UK and internationally.
Here at Freedom, we work hard to consistently deliver top-quality 5* customer service and in 2015 we won The Best Customer Service by a Provider Award at the Health Insurance Awards.
Our policies are designed for all levels of cover without stretching your budget. Starting from a standard cover, you can easily add other healthcare options to suit your health needs.

How to apply for Freedom Health Insurance

If you want to get a quote for the private health insurance policy that best suits your needs, you have 4 options to contact our friendly team:

  1. Get a quote by filling in the online form here.
  2. Call us on 0800 999 2013
  3. Email us [email protected]
  4. Live Chat to our friendly team