Do I pay the excess once a year or for every claim?

It depends entirely on your policy. The common UK arrangement is once per policy year, no matter how many separate courses of treatment you have, but a significant number of policies apply the excess per condition or per claim instead. The difference is invisible in a price comparison and very visible in a bad year: two unrelated problems cost one excess on the first basis and two on the second. Look for the words "per policy year", "per claim" or "per condition" in the wording, and if the document is ambiguous ask the insurer to confirm in writing before you buy.

What is the difference between an excess and a co-payment?

An excess is a fixed amount you pay towards an eligible bill. A co-payment is a percentage of the bill, sometimes subject to a cap. On a £400 outpatient bill a 20% co-payment costs you £80 where a £500 excess costs you the whole £400. On a £6,000 surgical bill the positions reverse: the co-payment costs £1,200 and the excess £500. Some policies combine the two, applying an excess first and a co-payment to the balance. When comparing quotes, price each structure against a realistic bill for the kind of treatment you are most likely to need.

Does a higher excess always make the policy cheaper?

Almost always the premium falls as the excess rises, because you are taking on more of the cost. How much it falls varies by insurer, age, hospital list and the modules you have chosen, and there is no published market-wide figure for the typical saving, so this guide does not quote one. Ask for the same quote at two or three excess levels and compare the annual premiums yourself. Then ask the second question: could you pay the higher excess at short notice? A saving that leaves you unable to fund a claim is not a saving.

When do I actually hand over the money?

After treatment, in almost all cases. The normal sequence is that the insurer authorises the treatment, the hospital invoices the insurer directly, and then either the hospital or the insurer bills you for your excess. You are rarely asked to pay it up front at admission. Keep the authorisation reference and the invoices, because if there is a dispute later about whether an amount is an excess, a shortfall or an uncovered charge, the paperwork is what resolves it. If a hospital asks for payment on the day, check with your insurer before paying.

Does the excess apply to outpatient treatment too?

Usually yes, if outpatient treatment is covered by your policy at all. That is why a high excess can make small outpatient claims not worth making: a £250 consultation against a £500 excess produces no payment from the insurer, and in some policies also uses none of your outpatient allowance. Some policies apply the excess only to inpatient and day-patient treatment, leaving outpatient cover to run against its own annual limit. Check which arrangement yours uses before choosing an excess level, particularly if the main value you expect from the policy is fast access to diagnostics.

Can I change my excess mid-policy?

Normally you change it at renewal rather than mid-term, because it is a rated term of the contract. Some insurers will consider a mid-term change, and may recalculate the premium from the date of the change; others will not. If you are considering a change because money is tight, say so when you call: raising the excess is one option, but changing the hospital list, removing a module or adjusting outpatient cover may achieve more. If you have already had treatment in the current year, ask how a mid-term change would affect any claim already in progress.

Does paying an excess count as a claim?

Yes. If the insurer has paid anything towards the treatment, that is a claim on the policy and it will be recorded as one, which can affect a no-claims discount where the policy operates one, and can feed into the renewal price. If the whole eligible bill fell below your excess and the insurer paid nothing, treatment may still be recorded as a notified claim even though no money changed hands. Ask your insurer how it treats notified-but-unpaid claims if you hold a policy with a no-claims discount scale, because practice differs.

Is the excess the only thing I might have to pay?

No, and this is the most expensive misunderstanding in the whole subject. Beyond the excess you may face a shortfall where a consultant charges more than the insurer’s fee schedule allows, amounts above an annual limit on a module such as outpatient or therapies, and the full cost of anything the policy excludes. None of these are capped by your excess. The way to avoid them is to confirm before treatment that the consultant is fee-assured with your insurer, that the facility is on your hospital list, and that the treatment has been authorised in advance.

Treatment costs

What is an excess on health insurance?

The short answer

An excess is the amount you pay towards eligible treatment before your insurer pays the rest. On UK private medical insurance it is usually charged once per policy year, though some policies apply it to each separate condition claimed for. Choosing a higher excess normally lowers the premium and raises what you pay at claim.

Written by Andrew Buscu. Reviewed by Ilana Eldad.

Published 14 September 2026. Last reviewed 14 September 2026. Next review due 14 March 2027.

Claims paid by insurers, 2024: £4 billion ^[1]
People covered, 2024: 6.5 million ^[1]
Excess options on one major policy: £100–£5,000 ^[9]
Who sets the excess rules: Your policy wording

What you need to know before you set your excess

The excess is your share of an eligible bill, not a fee you pay whether you claim or not. Read more
Whether it applies once a year or to every condition is the detail that matters most. Read more
An excess is a fixed amount; a co-payment is a percentage, and the two behave very differently on a large bill. Read more
Raising the excess lowers the premium, but the saving is only worth it if you could fund the excess. Read more
The excess is normally collected after treatment, by the hospital or the insurer. Read more

What an excess is

An excess is the amount you agree to pay towards eligible treatment before the insurer pays the rest. It is chosen when you take the policy out and it appears on your certificate of insurance. If the eligible bill is smaller than the excess, you pay all of it and the insurer pays nothing; if it is larger, you pay the excess and the insurer pays the balance, subject to the policy limits.

It exists for two reasons. It removes the administrative cost of processing very small claims, and it gives the policyholder a stake in the cost of treatment. Both effects are reflected in the premium, which is why a higher excess buys a lower price. What it does not do is change what is covered: an excess applies only to treatment the policy would otherwise pay for. On an excluded condition you pay the whole bill, excess or no excess.

Per year or per claim

This is the single most important thing to check, and it is not standard across the market. Most UK policies apply the excess once per policy year, however many separate courses of treatment you have. Others apply it per condition or per claim, so a year with two unrelated problems costs you two excesses. A £500 excess applied per claim is a very different product from a £500 excess applied per year, even though the quote may show the same number.

How the same excess behaves on different policy bases
Situation in one policy year	Per-policy-year excess	Per-claim or per-condition excess
One course of treatment	Paid once	Paid once
Two unrelated conditions treated	Paid once	Paid twice
Treatment that spans the renewal date	May be payable again in the new year	May be payable again in the new year
A claim smaller than the excess	You pay the whole bill	You pay the whole bill

The row about renewal catches people out most often. Where treatment runs across two policy years, many wordings treat the second year as a new year for excess purposes. If a course of treatment is likely to straddle your renewal date, ask the insurer in writing how the excess will be applied before the treatment begins.

Excess versus co-payment

An excess is a fixed amount. A co-payment is a percentage of the eligible bill, sometimes with a cap. On a small bill a co-payment can look cheaper; on a large one it can be far more expensive, because your share grows with the cost of treatment. Some policies use both. When comparing quotes, work out what each structure would cost you on a realistic bill rather than on the headline figure.

Choosing a higher excess

What works well

A lower premium every month, whether or not you claim
Fewer small claims, which on some policies helps protect a no-claims discount
Simple to plan for, because the amount is fixed and known in advance

What to watch

You must be able to find the money at short notice, when you are already unwell
A per-claim basis can multiply the cost in a bad year
Small outpatient claims may become not worth making at all

How the excess changes what you pay

There is no published, market-wide figure for how much a given excess reduces a premium, so this guide does not quote one. The saving varies by insurer, age, hospital list and the modules selected. The reliable way to find your own number is to ask for the same quote at two or three excess levels and compare the annual premiums directly — a comparison that takes minutes and answers the question for your circumstances rather than for an average.

A year with one course of treatment

Assumptions: a £500 excess applied once per policy year; an eligible bill of £3,200 for a consultation, a scan and day-case surgery; treatment authorised in advance and carried out at a hospital on the policy list; no co-payment and no annual limit reached. Figures are illustrative arithmetic, not a quotation.

Eligible treatment cost: £3,200
Excess you pay: £500
Insurer pays: £2,700
Second unrelated claim in the same year, per-year basis: No further excess
Second unrelated claim in the same year, per-claim basis: A further £500

The arithmetic is straightforward; the variable that changes the answer is the basis, not the amount. On a per-year basis this reader pays £500 in total for the year. On a per-claim basis the same two episodes cost £1,000. That is why the basis is worth more attention than the headline excess figure when comparing policies.

Market context is worth holding alongside the arithmetic. Insurers paid a record £4 billion of individual and workplace claims in 2024, up from £3.57 billion the year before, with 6.5 million people covered. ^[1] Rising claims costs feed through into renewal premiums across the market, and raising an excess is one of the few levers a policyholder controls when a renewal comes in higher than expected.

Private medical insurance claims paid, UK
2023	3.57 bn
2024	4 bn

Source: see [1]

“When a renewal comes in higher, the excess is the last thing I touch, not the first. I look at the hospital list and the outpatient limit first, because changing those changes what can actually be claimed. If the cover is right and the price still needs work, I ask for the same policy quoted at two excess levels and put the numbers side by side. If a year of premium saving does not cover the extra you would pay at the first claim, the higher excess is not a saving.”

Adviser insight — Andrew Buscu, PMI Specialist & Copywriter, PremierPMI

How it is collected

Treatment is authorised The insurer confirms the treatment is eligible before it happens. This is pre-authorisation.
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.
Anything uncovered is billed to you too Amounts above a limit, or fees above the insurer’s fee schedule, sit outside the excess.

The last step is the one to watch. A shortfall — the gap between what a consultant charges and what the insurer will pay — is not part of your excess and is not capped by it. Ask whether the consultant is fee-assured by your insurer before treatment. Information about private consultants and hospitals is published by the Private Healthcare Information Network, and disclosure obligations on private providers followed the competition regulator’s market investigation. ^[2]^[3]

Where the rules come from

The excess is a contractual term, so the wording governs. Regulation shapes how it must be explained to you: firms must give appropriate product information in good time before you commit, including a short standardised summary, ^[4] and under the Consumer Duty they must support your understanding rather than merely disclose. ^[5] If your excess basis is not clear from the documents, ask for it in writing before you buy.

If you believe an excess has been applied incorrectly, complain to the insurer first, then to the Financial Ombudsman Service if you are unhappy with the final response. ^[6] You can check the firm is authorised on the Financial Services Register. ^[7] For the wider picture, read what private health insurance covers and how medical underwriting works.

What excess levels are actually offered

There is no published market-wide table of excess levels, because each insurer sets its own. The range is wide, though: one major insurer publishes options of £100, £200, £500, £1,000, £3,000 and £5,000 on its main personal policy, chosen either when you apply or at renewal. ^[9] Most people buying individual cover sit at the lower end of a range like that. The very high figures exist mainly for people who want the policy to catch a serious, expensive episode and are content to pay for everything smaller themselves. Ask your insurer or broker for the full list of levels available on the specific policy, not the levels advertised generally, because they differ from product to product.

Where the excess sits in the wider cost picture

An excess is one lever among several, and it is easy to over-weight it. The others are the hospital list, the outpatient limit, whether therapies and diagnostics sit inside or outside that limit, and the underwriting basis. Changing any of them moves the price, and two of them change what you can actually claim for. Treat the excess as the last adjustment you make rather than the first, once the cover itself is right.

It also helps to know what the market pays out overall: insurers covered 6.5 million people and paid a record £4 billion in claims in 2024, against an average excess that is small relative to a single episode of private treatment. ^[1] The practical test at renewal is simple. Ask for the same policy quoted at two excess levels, look at the difference in annual premium, and compare it with the extra you would pay out of pocket the first time you claim. If a year of savings does not cover the additional excess, the higher excess is a bet rather than a saving. Your insurer must give you the information you need to make that comparison in good time before you commit. ^[8]

Common questions

Do I pay the excess once a year or for every claim?: It depends entirely on your policy. The common UK arrangement is once per policy year, no matter how many separate courses of treatment you have, but a significant number of policies apply the excess per condition or per claim instead. The difference is invisible in a price comparison and very visible in a bad year: two unrelated problems cost one excess on the first basis and two on the second. Look for the words "per policy year", "per claim" or "per condition" in the wording, and if the document is ambiguous ask the insurer to confirm in writing before you buy.
What is the difference between an excess and a co-payment?: An excess is a fixed amount you pay towards an eligible bill. A co-payment is a percentage of the bill, sometimes subject to a cap. On a £400 outpatient bill a 20% co-payment costs you £80 where a £500 excess costs you the whole £400. On a £6,000 surgical bill the positions reverse: the co-payment costs £1,200 and the excess £500. Some policies combine the two, applying an excess first and a co-payment to the balance. When comparing quotes, price each structure against a realistic bill for the kind of treatment you are most likely to need.
Does a higher excess always make the policy cheaper?: Almost always the premium falls as the excess rises, because you are taking on more of the cost. How much it falls varies by insurer, age, hospital list and the modules you have chosen, and there is no published market-wide figure for the typical saving, so this guide does not quote one. Ask for the same quote at two or three excess levels and compare the annual premiums yourself. Then ask the second question: could you pay the higher excess at short notice? A saving that leaves you unable to fund a claim is not a saving.
When do I actually hand over the money?: After treatment, in almost all cases. The normal sequence is that the insurer authorises the treatment, the hospital invoices the insurer directly, and then either the hospital or the insurer bills you for your excess. You are rarely asked to pay it up front at admission. Keep the authorisation reference and the invoices, because if there is a dispute later about whether an amount is an excess, a shortfall or an uncovered charge, the paperwork is what resolves it. If a hospital asks for payment on the day, check with your insurer before paying.
Does the excess apply to outpatient treatment too?: Usually yes, if outpatient treatment is covered by your policy at all. That is why a high excess can make small outpatient claims not worth making: a £250 consultation against a £500 excess produces no payment from the insurer, and in some policies also uses none of your outpatient allowance. Some policies apply the excess only to inpatient and day-patient treatment, leaving outpatient cover to run against its own annual limit. Check which arrangement yours uses before choosing an excess level, particularly if the main value you expect from the policy is fast access to diagnostics.
Can I change my excess mid-policy?: Normally you change it at renewal rather than mid-term, because it is a rated term of the contract. Some insurers will consider a mid-term change, and may recalculate the premium from the date of the change; others will not. If you are considering a change because money is tight, say so when you call: raising the excess is one option, but changing the hospital list, removing a module or adjusting outpatient cover may achieve more. If you have already had treatment in the current year, ask how a mid-term change would affect any claim already in progress.
Does paying an excess count as a claim?: Yes. If the insurer has paid anything towards the treatment, that is a claim on the policy and it will be recorded as one, which can affect a no-claims discount where the policy operates one, and can feed into the renewal price. If the whole eligible bill fell below your excess and the insurer paid nothing, treatment may still be recorded as a notified claim even though no money changed hands. Ask your insurer how it treats notified-but-unpaid claims if you hold a policy with a no-claims discount scale, because practice differs.
Is the excess the only thing I might have to pay?: No, and this is the most expensive misunderstanding in the whole subject. Beyond the excess you may face a shortfall where a consultant charges more than the insurer’s fee schedule allows, amounts above an annual limit on a module such as outpatient or therapies, and the full cost of anything the policy excludes. None of these are capped by your excess. The way to avoid them is to confirm before treatment that the consultant is fee-assured with your insurer, that the facility is on your hospital list, and that the treatment has been authorised in advance.

Sources

Association of British Insurers. Insurers process record £4bn across individual and workplace health schemes (2024 data). 21 January 2026 (primary source)
Private Healthcare Information Network. Information about private hospitals and consultants. Accessed 14 September 2026 (primary source)
Competition and Markets Authority. Private healthcare market investigation. 2 April 2014; case page updated 2 July 2026 (primary source)
Financial Conduct Authority. ICOBS 6: Product information (FCA Handbook). Accessed 14 September 2026 (primary source)
Financial Conduct Authority. The Consumer Duty. Accessed 14 September 2026 (primary source)
Financial Ombudsman Service. Complaints about medical insurance. Accessed 14 September 2026 (primary source)
Financial Conduct Authority. The Financial Services Register. Continuously updated; accessed 14 September 2026 (primary source)
Financial Conduct Authority. ICOBS 4: Information about the firm, its services and remuneration (FCA Handbook). Accessed 14 September 2026 (primary source)
Aviva. How health insurance excess works (Healthier Solutions excess options). Published 26 April 2023; last updated 23 April 2025 (primary source)