Health Insurance Excess Explained: How It Works (2026)

posted 6th July 2026

Posted 2 weeks ago

By Darren Lewis

Knowledge Hub

Knowledge Hub · Health Insurance Explained

Health Insurance Excess Explained: How It Works

Updated July 2026 7 minute read By Darren Lewis, Health Insurance Specialist

A health insurance excess is the amount you agree to pay towards an eligible claim before your insurer covers the rest. If you have a £250 excess and need treatment costing £1,000, you pay £250 and your insurer pays the remaining £750.

This guide compares how excess works across the UK's leading insurers, when a higher excess genuinely saves you money, and the exact policy wording to check before you buy.

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At A Glance

Health Insurance Excess At A Glance

What It Is

The amount you pay towards an eligible claim before your insurer covers the rest.

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Why It Matters

A higher excess usually lowers your premium, but raises what you pay if you claim.

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How It Applies

Once per policy year is most common, but it can also apply per claim or per condition.

Key Point

Compare the premium saving against the excess itself before assuming higher is better.

The Basics

How Does Health Insurance Excess Work?

When you take out private health insurance, most insurers let you choose an excess, an amount you agree to put towards any eligible claim.

Say you choose a £250 excess and need treatment costing £1,000. You pay the first £250, and your insurer pays the remaining £750, subject to your policy terms and limits.

Agreeing to take on that first slice of cost is exactly why choosing an excess typically brings your monthly premium down.

Private health insurance excess explained, couple reviewing their policy at home

Two Types Of Excess

Voluntary Excess vs Compulsory Excess

Not every excess on your policy is one you chose. There are actually two kinds, and it's worth knowing the difference.

Voluntary excess

The amount you choose yourself when you take out or renew your policy. This is the lever that affects your premium, and the one most of this guide is about.

Compulsory excess

A fixed amount set by the insurer, sometimes applied to specific benefits like outpatient or mental health claims. You can't opt out of it, and it sits on top of any voluntary excess you choose.

Read The Small Print

The Three Ways An Excess Can Apply

This is the single detail that catches people out most. The same £250 excess can mean very different things depending on how your policy defines it.

Once per policy year

You pay it once, no matter how many claims you make that year.

Once per claim

Could apply every time you start a new claim.

Once per condition

Applies separately for each different condition you claim for.

Same £250 excess, three very different outcomes

Two claims in a year could mean paying the excess once, twice, or once per condition, depending on how your policy defines it. Always check the wording before you buy.

Most UK insurers, including Aviva and Bupa, apply the excess once per person, per policy year, on your first claim. But some policies apply it per claim episode, and treatment that runs across a renewal date can trigger the excess twice, once in each policy year.

Important question to ask

Does the excess apply once per policy year, per claim, per condition, or in another way? Get this in writing before you buy.

Cost Impact

How Does Excess Affect The Price?

Raising your excess generally lowers your monthly premium, because you're agreeing to shoulder more of the cost yourself if you claim.

Excess Level	Typical Effect On Premium	Things To Consider
£0 excess	Usually higher	You pay more each month, but nothing extra if you claim.
£100 to £250 excess	Often balanced	Can reduce the premium without creating a large upfront claim cost.
£500 or more	Usually lower	Suits people comfortable paying more if they claim, in exchange for a lower monthly cost.

Exact figures depend on your age, postcode, insurer and cover level. Compare your options to see what each excess level would mean for your premium.

CMHI Expert Insight

Worked Example: Is A Higher Excess Worth It?

Many people default to the lowest possible excess because it feels safer. Sometimes a higher excess works out better financially. Here's a simple illustrative example.

If choosing a £200 annual excess reduces your premium by £300 a year

You've saved £300 before any claim is even made. Here's how that plays out.

Premium saving£300

Annual excess£200

Better off after one claim£100

Make one eligible claim while the excess applies once per policy year, and you pay the £200 excess but still finish £100 better off for the year. No claim at all, and you keep the full £300 saving. This is exactly why how the excess applies matters more than the headline number.

Is It Right For You?

Which Excess Level Suits You?

Your health, savings and appetite for risk all factor into this, not just the premium saving.

A higher excess may suit you if

You're generally healthy and rarely need treatment
You have savings that could comfortably cover the excess
The yearly premium saving is greater than the excess itself
You mainly want protection against larger, unexpected medical bills

A lower excess may suit you if

You're buying cover for a family or have ongoing health needs
A larger excess would be difficult to pay unexpectedly
You want more certainty over what a claim will cost you
You'd rather pay a bit more monthly for peace of mind

Family Cover

How Does Excess Work On Family Health Insurance?

On most family policies, the excess applies per person, per policy year, not once for the whole family.

That means if your partner makes a claim and pays a £250 excess, that only satisfies their own excess for the year. If you then make a separate claim, you'd pay your own £250 excess too. With two or more family members claiming in the same year, the excess cost can add up faster than a single-person policy, so it's worth checking whether your insurer offers a lower per-person excess or a family-wide cap.

Avoid These

Common Mistakes People Make With Excess

Assuming a higher excess always means more risk

Not always. If the annual saving is larger than the excess, and it applies once per year, the numbers can still work in your favour.

Choosing the cheapest premium without checking the excess

A low headline price can hide a high excess, or an excess that applies per claim rather than per year. Always check both together.

Assuming every insurer applies excess the same way

They don't. Some apply it once per year, others per claim or per condition. This is exactly why the policy wording matters.

Not checking if excess applies to NHS cash benefit

If you use the NHS instead of going private, you're not making a claim on your policy, so excess typically doesn't apply, and some insurers even pay you a small cash benefit.

Before You Buy

Questions To Ask Before Choosing An Excess

How much does each excess option reduce the monthly premium?
Does the saving outweigh the extra excess risk?
Is the excess applied annually, per claim, or per condition?
Could the excess apply more than once in a year?
Would the excess still feel affordable if treatment was needed?
On a family policy, does the excess apply per person?
Can I change my excess at renewal, and is there a cooling-off period?

Why Compare With Us

How CMHI Helps Make This Simpler

Insurer pages can only tell you how their own excess works. We compare excess options across leading UK insurers side by side, so you can see how the same amount plays out differently from one provider to the next.

That includes excess options, hospital access, outpatient limits, cancer cover, underwriting and renewal terms.

Get a clearer comparison and, where it's useful, direct access to specialist FCA-authorised broker support.

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FAQs

Health Insurance Excess FAQs

Is a higher health insurance excess always better?

No. A higher excess may reduce the monthly premium, but it depends on the size of the saving and how the excess is applied.

Is health insurance excess paid once a year?

Most commonly, yes, once per person per policy year. Some policies apply it per claim or per condition instead, so always check the wording.

Can I have private health insurance with no excess?

Some insurers offer a £0 excess option, although the monthly premium is usually higher.

Does excess apply if I use NHS treatment instead of going private?

No. If you're treated on the NHS you're not making a claim on your policy, so excess doesn't apply, and some insurers pay a small NHS cash benefit instead.

Can I change my excess after buying a policy?

Usually only at renewal, though many insurers offer a cooling-off period of 14 to 21 days after purchase where changes may still be possible.

Does excess apply per person on a family policy?

Typically yes. Each family member usually has their own excess to meet, so the total cost can add up if more than one person claims in a year.

What's the difference between voluntary and compulsory excess?

Voluntary excess is the amount you choose yourself to lower your premium. Compulsory excess is a fixed amount set by the insurer, often on specific benefits, that you can't opt out of.

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Editorial Note & Sources

Written and reviewed by: Darren Lewis, health insurance specialist and founder of Compare My Health Insurance. Last reviewed: July 2026. Next scheduled review: January 2027.

This guide is designed to explain private health insurance in plain English and does not provide regulated financial advice. Where appropriate, CMHI may introduce you to specialist FCA-authorised broker partners who can give personalised advice based on your circumstances.

Sources: FCA, ABI, Competition and Markets Authority, NHS England and UK health insurer policy documentation.

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