Treatment costs
What is an excess on health insurance?
The short answer
An excess is the amount you pay towards a claim before your insurer pays the rest. On most private health insurance policies it applies once per policy year, not per claim. Choosing a higher excess lowers your premium, because you carry more of the cost of any treatment yourself.
Written by Andrew Buscu. Reviewed by Ilana Eldad.
Published 2026-09-14. Last reviewed 2026-09-14. Next review due 2027-03-14.
How an excess is applied
Most UK insurers apply the excess per policy year: once you have paid it, further eligible treatment in that year is covered in full, subject to your limits. A few apply it per condition, so a second unrelated condition triggers it again. The policy wording states which applies. [1]
| Structure | What it means for you |
|---|---|
| Per policy year | Paid once each year, however many claims you make. |
| Per condition | Paid again for each separate condition claimed for. |
| Outpatient only | Applies to consultations and tests, not to inpatient treatment. |
| Co-payment (percentage) | You pay a share of each claim rather than a fixed amount, often up to a cap. |
Excess and premium
Raising the excess reduces the premium because the insurer expects to pay less. The saving is not proportional, and it varies by insurer, age and the rest of the policy design. The right level is the largest amount you could comfortably pay at short notice. [2]
No regulator or trade body publishes a standard saving for a given excess, and we will not invent one: insurers price individually, so the only reliable comparison is the same policy quoted at two excess levels on the same day. Rising claims costs across the market — a record £4 billion processed in 2024 — feed into premiums regardless of the excess you pick. [1]
£4 billion — Individual and workplace private medical insurance claims processed by UK insurers in 2024, a 13% rise on 2023 [1]
When you actually pay it
- Treatment is authorised The insurer confirms the treatment is eligible before it happens.
- The hospital invoices the insurer Most bills are settled directly between hospital and insurer.
- You are billed for the excess Either the hospital or the insurer collects it from you afterwards.
Common questions
- Do I pay the excess once a year or for every claim?
- On most UK private medical insurance policies the excess applies once per policy year, so later eligible treatment in the same year is covered in full within your limits. Some policies apply it per condition instead — the wording tells you which.
- What is the difference between an excess and a co-payment?
- An excess is a fixed amount you pay towards treatment. A co-payment is a percentage of each claim, often capped at a yearly maximum, so what you pay rises with the size of the bill rather than staying flat.
- Does a higher excess always make the policy cheaper?
- It normally lowers the premium, because the insurer expects to pay less, but the reduction is not proportional and differs by insurer, age and cover. Compare identical quotes at two excess levels rather than relying on a rule of thumb.
Sources
- Association of British Insurers. Insurers process record £4bn across individual and workplace health schemes (2024 data). 21 January 2026 (primary source)
- Competition and Markets Authority. Private healthcare market investigation: final report. 2 April 2014 (primary source)