Should you pay for Private Medical Insurance?

In recent years, it’s fair to say that the NHS has become less reliable and we have found that an increasing number of our clients are opting to self-fund medical treatment. It seems unlikely that the NHS will improve dramatically in the immediate future, and it has become important for retirees to make choices about healthcare, and its cost, as part of their retirement plan. There are currently 7 million patients awaiting treatment – over 10% of the UK population (1).

The NHS has a deserved reputation for excellence in particular fields, but, for many people, their confidence has been shaken by the declining standards in so many parts of the service. As a result, many people seek alternatives when they need treatment and many are choosing to use private medical insurance or to self-fund, in order to speed up treatment or benefit from better service standards.

Private Medical Insurance is a specialist field, and our view is that you should take advice from an expert before taking out cover. We don’t consider ourselves experts in this field, but we have linked up with a specialist broker, so that our clients can consider their options.

  1. Source data – British Medical Association and Statista

How much does it cost to self-fund treatment?

For most of our lives, we’ve been used to medical treatment being free, as a result of the NHS, so it’s difficult to estimate what the costs of treatment might be. Typical costs are set out below:

  • Knee replacement – £15,000
  • Cataract surgery – £2,500 per eye
  • MRI Scan – £600
  • Heart surgery – £20,000
  • Routine cancer treatment program – £50,000

Some people will get lucky – they may not need treatment at all during their lifetime, or NHS treatment may be adequate for them. However, many will need to pay for treatment, and, if they have not included this in their retirement plan, they may have to make some complicated choices, at a difficult time.

Should you buy Private Medical Insurance?

The core benefit of PMI is to facilitate private treatment, outside the NHS. Even the most basic policy will cover all surgical operations and cancer treatment in full. A commonly unappreciated benefit of a PMI policy is that it offers access to treatment options that are not available through the NHS; this can be of particular importance with cancer care.

The national average premium for people in their 60’s is typically less than £100 per month and this will usually cover the following core benefits:

  • In-patient surgical care – e.g.  heart / joint operations
  • Cancer care – including drugs and treatment not available on the NHS
  • Day-patient surgical care – e.g. cataract operations
  • CT/ PET/ MRI scans
  • Virtual private GP consultations

Based on quotations obtained in June 2023 from a selected panel of UK healthcare providers. The cover proposed is core cover and with a £500 annual excess.

How can you reduce the monthly premiums?

There are a variety of ways of reducing monthly premiums; it’s not uncommon, for example, to choose a high excess, and this means that you are effectively self-funding some of the cost of treatment.

When people already have cover, they often stay with the same insurer, without good reason. It is certainly the case that loyalty is not a personality trait that the insurance industry values, and it is often the case that a change of insurer will reduce premiums. Many people worry that, if they have claimed previously, their pre-existing condition will not be covered by a new insurer. However, this is often not the case, and this is one of the situations where the knowledge and experience of a specialist can be valuable. We often hear that people are reluctant to adjust elements of their cover or switch between different providers out of fear of getting caught out by the small print – again, this is where a specialist can add value.

If you do want to reduce costs, it makes sense to seek the guidance of an expert who can offer you clear and unbiased advice so that you can make a fully informed decision.

Should you pay for Private Medical Insurance?

It’s important for your retirement plan to be realistic and for you to make informed choices when you retire. Realistically, this means choosing to rely on the NHS, self-funding treatment or paying for insurance. Hoping it will all be ok isn’t an option we would recommend! Our suggestion is that you find out what the cost of cover might be, and that you use that information to make that choice. If you don’t choose insurance, we recommend that you have a plan to cover the potential costs of medical procedures and treatment. It shouldn’t be a surprise to any of us to find that, as we age, our health declines, so failing to plan for this eventuality really is planning to fail.

If you would like to discuss the options, or would like us to put you in touch with our chosen specialist broker, please contact us.

Philip Wise |

Managing Director and Chartered Financial Planner

This guide is for information purposes and does not constitute financial advice, which should be based on your individual circumstances.
Generally, these plans have no cash in value at any time and will cease at the end of the term. If premiums are not maintained, the cover will lapse. 

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