Health insurance

How do health insurance renewals work, and why do premiums rise?

The short answer

Health insurance is an annual contract: at renewal the insurer re-rates your premium for your new age, any claims on a no-claims scale, and movements across its whole book, including medical inflation. Premiums commonly rise even in claim-free years. Renewal is also your annual opportunity to re-check cover and the wider market.

Written by Stuart Hendy. Reviewed by Emma Leadbetter.

Published 2026-09-15. Last reviewed 2026-09-15. Next review due 2026-12-15.

People covered by PMI, UK, 2024
6.5m [1]
Claims processed, 2024
£4bn [1]
Covered via workplace schemes
4.8m [1]
Growth in covered lives, 2024
~4% [1]

What to know about health insurance renewals and rising premiums

  1. A policy is an annual contract that pays for eligible, pre-authorised private treatment of new conditions. Read more
  2. Underwriting decides what sits inside cover before you buy; exclusions are the rule, not the exception. Read more
  3. Disclosure law protects you if you take reasonable care answering the questions you are asked. Read more
  4. Premiums are re-rated at renewal; price figures need a named source and a date. Read more
  5. Declined claims follow a formal complaints route ending at the Financial Ombudsman Service. Read more

What the contract actually does

Private medical insurance is an annual contract between you and an insurer. In exchange for the premium, the insurer agrees to pay for eligible private treatment of acute conditions that arise after cover starts. The standard journey runs: GP referral, insurer pre-authorisation, treatment at a recognised facility, and the insurer settling the invoice directly. The Association of British Insurers reported 6.5 million people covered in 2024, with a record £4 billion of individual and workplace claims processed that year. [1]

Two structural points shape everything else. First, cover is for acute conditions — treatment intended to return you to your previous state of health — and not for chronic conditions that need ongoing management, which remain with the NHS. Second, almost nothing is paid without authorisation in advance. Our guide to what private health insurance covers maps the covered territory in full; this guide stays on health insurance renewals and rising premiums.

The UK private medical insurance market at a glance (ABI, January 2026)
MeasureFigureHow to read it
People covered, 20246.5 millionIndividual and workplace policies combined
Claims processed, 2024£4 billionA record annual total across the market
Covered through workAround 4.8 millionEmployer schemes are the larger part of the market
Year-on-year growthAround 4%Growth in covered lives, 2023 to 2024

Underwriting and exclusions

Underwriting is the insurer’s assessment of your medical history, and it decides what sits inside or outside your cover from day one. The two mainstream routes are moratorium underwriting — no medical questions, with recent conditions automatically excluded until a trouble-free period passes — and full medical underwriting, where you declare your history and exclusions are stated upfront. Aviva’s published moratorium basis, for example, looks back five years and lifts an exclusion after two continuous years free of medication, treatment, diagnostic tests or advice; each insurer sets its own periods in its wording. [17]How medical underwriting works explains both in detail. A pre-existing condition is usually excluded under either basis unless the insurer agrees otherwise in writing.

Thinking about health insurance renewals and rising premiums

What works well

  • Annual contracts give a regular checkpoint to re-shop the market.
  • Benefit adjustments can offset part of an increase.
  • The Consumer Duty requires fair value in pricing.

What to watch

  • Switching to save money re-opens underwriting and exclusions.
  • Claim-free years do not guarantee a flat renewal.
  • An unexplained increase is worth a written question — and a complaint if unresolved.

Your disclosure rights

The Consumer Insurance (Disclosure and Representations) Act 2012 replaced the old duty to volunteer everything with a duty to take reasonable care to answer the insurer’s questions accurately and not mislead. [7] The Insurance Act 2015 added proportional remedies: an insurer that would have offered cover on different terms must apply those terms rather than voiding the policy outright, unless the misrepresentation was deliberate or reckless. [8] Alongside the statutes, the FCA’s product information rules require insurers to give you an Insurance Product Information Document and the full wording before you buy. [4]

The FCA’s Consumer Duty adds a further layer: insurers and intermediaries must act to deliver good outcomes for retail customers, which covers how products are designed, priced, explained and serviced. [5] You can check that any insurer or broker you deal with is authorised on the Financial Services Register. [3]

Anatomy of a renewal increase

A renewal increase is usually a compound of three forces: your age band moving, your own claims experience where a no-claims scale applies, and a book-level adjustment driven by medical inflation — the rate at which the cost of treatment, drugs and technology rises, which has historically outpaced general inflation [STATISTIC REQUIRED: current UK medical inflation figure, named source]. Bupa’s own customer literature attributes rising costs to age and to advances in medical technology, drug prices and new treatments (source 16). The FCA’s Consumer Duty requires insurers to deliver fair value, which covers how renewal prices are set and explained — but note that the FCA’s ban on charging renewing customers more than equivalent new-business prices is scoped to home and motor insurance, not private medical insurance (source 18). Your levers at renewal are real: adjust the outpatient level, excess or hospital list, ask for the increase broken down, and compare the market — bearing in mind that switching re-opens underwriting, so weigh any new exclusions against the saving.

Ask your insurer, in writing, to split the renewal increase into age, claims and book-level components, and keep the answer with the renewal notice. Whatever the specifics of health insurance renewals and rising premiums, the discipline that protects you is always the same: get the insurer’s position in writing before treatment, keep the documents, and compare like with like. The CMA’s private healthcare market investigation imposed order-backed requirements on the private hospital market precisely because opacity on price and information harms patients. [9] The Private Healthcare Information Network exists to publish comparable performance and pricing information for private hospitals. [10]

What moves the price

Premiums are priced annually and re-rated at renewal. The inputs an insurer can use include your age, your postcode, the level of outpatient cover you choose, the excess you accept, the hospital list you select and, on some policies, a no-claims discount scale. Medical costs have historically risen faster than general inflation, which is why premiums can climb even when you do not claim [STATISTIC REQUIRED: current UK medical inflation figure, named source]. Premiums carry Insurance Premium Tax at the standard rate of 12 per cent. [15]

People covered by private medical insurance, UK, 2024
All covered people6.5million
Through workplace schemes4.8million
Source: see [1]

The workplace share of the market matters when you think about price: if your employer already provides cover, the question shifts from “what would a policy cost me” to “what gaps does the scheme leave”. Average premium figures circulate widely online, but an average built from different ages, postcodes and benefit levels cannot predict your quote — treat any average without a named source and date as unusable.

Decomposing one renewal increase

Assumptions: the reader is comparing insurance structures and costs only. Clinical suitability has already been discussed with the appropriate healthcare team. No premium or price is assumed where it has not been published, sourced and dated.

Last year’s premium
[RENEWAL NOTICE REQUIRED]
This year’s premium
[RENEWAL NOTICE REQUIRED]
Increase attributed to
[INSURER’S WRITTEN BREAKDOWN REQUIRED]
Offset options
[BENEFIT ADJUSTMENT QUOTES REQUIRED]

The result is a documented comparison, not a fabricated quote. Where an insurer has not supplied a current written figure, the honest entry remains a visible placeholder until the reader replaces it with their own dated document.

If something goes wrong

Complain to the insurer first, in writing, and ask which clause of the policy wording the decision rests on. The insurer must investigate and give a final response. If you are still unhappy after that response — or after eight weeks — the Financial Ombudsman Service decides medical insurance complaints free of charge for consumers. [6] For the wider regulatory picture, read who regulates health insurance in the UK.

  1. Read the IPID before you buy The Insurance Product Information Document summarises what is and is not covered; the full wording governs.
  2. Answer application questions with reasonable care Ask for clarification in writing if a question is ambiguous; keep a copy of your answers.
  3. Authorise before you book Contact the insurer before any appointment, scan or procedure it will be asked to pay for.
  4. Stay inside the list Use recognised specialists and facilities on your hospital list to avoid shortfalls.
  5. Keep every document Dates, reference numbers and written decisions are what resolve disputes later.
  6. Review at renewal Re-check the market and your cover level each year rather than accepting the renewal quote automatically.

“On health insurance renewals and rising premiums, I would separate the mechanical question from the clinical one. The mechanical question is always: what does this contract pay for, on what evidence, confirmed where in writing? The clinical question belongs with the healthcare team. When clients keep those two apart — and keep every insurer answer in writing — the surprises almost disappear.”

Adviser insight — Parvoz Haydarov, Founder, PremierPMI, PremierPMI

Where the NHS fits

Holding a policy changes nothing about your NHS entitlements: the NHS Constitution applies regardless of insurance, and government guidance requires NHS-funded and privately funded elements of care to be kept clearly separate. [13][14] Many people use a policy for prompt diagnostics and planned treatment while the NHS handles emergencies, GP care and long-term conditions. Our guides to health insurance and NHS waiting lists and whether going private affects NHS care cover the boundary in detail.[11][12]

Common questions

Is private health insurance a replacement for the NHS?
No. Emergency care, GP services and the long-term management of ongoing conditions remain NHS services, and holding a policy does not remove or reduce any NHS entitlement — the NHS Constitution applies to you regardless. [13] What a policy adds is a parallel, paid route to planned treatment of new, eligible conditions: prompt diagnostics, a choice of recognised facility and a settled invoice rather than a wait. Most policyholders use both systems side by side. [1] Whatever your question about health insurance renewals and rising premiums, frame it as “what does the contract pay for, alongside the NHS” — never “which system instead of the other”.
Do I have to declare my medical history when I apply?
It depends on the underwriting basis. Under full medical underwriting you answer health questions upfront and exclusions are stated before you buy. Under a moratorium you answer no medical questions, but conditions from a recent look-back period are automatically excluded until you complete a set trouble-free period. Either way, the Consumer Insurance (Disclosure and Representations) Act 2012 requires you to take reasonable care to answer questions accurately and not mislead. [7] If you are unsure what a question means, ask the insurer to clarify in writing before you answer — a careless answer can matter years later at claim.
Will the insurer pay the hospital directly?
In most cases, yes — that is the point of pre-authorisation. You contact the insurer before treatment, it confirms the condition is eligible, agrees the fee and the facility, and then settles recognised invoices directly with the hospital and the specialists. If you go ahead without authorisation, or use a facility outside your hospital list, you can be left to pay and reclaim — sometimes only partially, because of a shortfall between a consultant’s fee and what the insurer recognises. The FCA’s product information rules require insurers to give you the documents that explain these mechanics before you buy. [4]
What can I do if the insurer refuses to pay?
Ask, in writing, which clause of the policy wording the decision rests on. Most refusals trace back to a small set of causes: the condition was pre-existing or chronic, treatment was not authorised in advance, the facility was outside the hospital list, or an annual limit had been used. Complain formally to the insurer first — it must give a final response. If you remain unhappy after that response, or after eight weeks, the Financial Ombudsman Service can decide medical insurance complaints free of charge for consumers. [6] Keep every letter, reference number and date from the first phone call onwards; the paper trail is what the Ombudsman works from.
Are health insurance payouts taxed?
Private medical insurance pays providers, not you, so there is usually no personal tax on settled claims. The tax points sit elsewhere: premiums carry Insurance Premium Tax at the standard rate of 12 per cent (the higher 20 per cent rate applies to travel and certain other insurance, not PMI). [15] If an employer provides your cover it is normally treated as a benefit in kind reported on a P11D [SOURCE REQUIRED: HMRC guidance on medical insurance benefits]. Business schemes have their own corporation tax treatment. Tax rules change and depend on your circumstances, so confirm the current position with HMRC guidance or a qualified tax adviser before making a decision based on tax.
Can I switch insurer without losing cover?
Switching is possible, but the underwriting question comes first. A new insurer will normally underwrite you afresh, and anything that has arisen since your original policy started can become a new exclusion. Some insurers offer continued personal medical exclusions terms, which carry your existing exclusions across without adding new ones for the same history — but the offer, and its precise wording, must be confirmed in writing before you cancel anything. [8] Never cancel the old policy until the new one is in force, and compare what is excluded under each, not just the headline premium.
Does my employer’s scheme affect what I can buy myself?
An employer scheme and a personal policy are independent contracts. The ABI reports that around 4.8 million people were covered through workplace schemes in 2024, out of 6.5 million covered overall, so many people encounter health insurance first at work. [1] If you leave that employer, the cover usually ends; some schemes offer a continuation option on personal terms, which is often the cheapest way to keep the underwriting position you built up. Whether you also want a personal policy depends on gaps in the scheme’s cover — its outpatient limits, hospital list and excess — not on the scheme’s existence alone.
Where can I find clinical information connected with health insurance renewals and rising premiums?
The Health Guide does not provide diagnosis, symptom, treatment or prognosis information. This guide is limited to how insurance works, what it costs and what your rights are. For clinical information use the NHS website and speak to the healthcare team responsible for your care. If your question is whether a policy would pay for a specific treatment, put that question to the insurer in writing before booking anything, and keep the written answer with your policy documents. NHS 111 can direct urgent clinical concerns, and your GP remains the right contact for anything about the condition itself.

Sources

  1. Association of British Insurers, reported by The Independent. Record £4bn in claims processed by health insurers in 2024 — ABI. 21 January 2026 (primary source)
  2. Financial Conduct Authority. About the FCA. Accessed 15 September 2026 (primary source)
  3. Financial Conduct Authority. The Financial Services Register. Continuously updated; accessed 15 September 2026 (primary source)
  4. Financial Conduct Authority. ICOBS 6: Product information (FCA Handbook). Accessed 15 September 2026 (primary source)
  5. Financial Conduct Authority. The Consumer Duty. Accessed 15 September 2026 (primary source)
  6. Financial Ombudsman Service. Medical insurance complaints. Accessed 15 September 2026 (primary source)
  7. UK Parliament (legislation.gov.uk). Consumer Insurance (Disclosure and Representations) Act 2012. Enacted 8 March 2012 (primary source)
  8. UK Parliament (legislation.gov.uk). Insurance Act 2015. Enacted 12 February 2015 (primary source)
  9. Competition and Markets Authority. Private Healthcare Market Investigation Order 2014. 1 October 2014 (primary source)
  10. Private Healthcare Information Network. About private hospital pricing in the UK. Updated 16 June 2026 (primary source)
  11. NHS. Guide to NHS waiting times in England. Accessed 15 September 2026 (primary source)
  12. NHS. Your choices in the NHS. Accessed 15 September 2026 (primary source)
  13. Department of Health and Social Care. The NHS Constitution for England. Updated 17 August 2023 (primary source)
  14. Department of Health. NHS patients who wish to pay for additional private care. 23 March 2009 (primary source)
  15. HM Revenue & Customs (gov.uk). Insurance Premium Tax. Updated 6 March 2019; rates unchanged as accessed 15 September 2026 (primary source)
  16. Bupa. No Claims Discount information for Bupa By You. January 2022 (primary source)
  17. Aviva. What’s moratorium and full medical underwriting?. Accessed 15 September 2026 (primary source)
  18. Financial Conduct Authority. ICOBS 6B: Home insurance and motor insurance pricing (FCA Handbook). Updated 26 June 2026 (primary source)
  19. Financial Ombudsman Service. Annual complaints data and insight 2024/25. 2 July 2025 (primary source)