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7 Things Affecting The Cost Of Your Health Insurance

Moneymagpie Team 14th Jun 2024 No Comments

Reading Time: 3 minutes

Health insurance is an essential component of personal financial planning, offering peace of mind and protection against unexpected medical costs.

However, the cost of health insurance can vary significantly based on several factors. 

Understanding these factors and how they influence premiums can help you make informed decisions and potentially save on your health insurance costs.

Here’s a detailed look at seven key factors affecting the cost of health insurance and tips on how to save.

  1. Age
  2. Location
  3. Coverage Level
  4. Excess Amount
  5. Consultant Access
  6. Hospital List
  7. No Claims Discount (NCD)

1. Age

One of the most significant factors influencing the cost of health insurance is age. As we age, the likelihood of needing medical care increases, and so do the premiums. This is especially true as individuals enter retirement and later life, where health issues become more prevalent.

2. Location

Where you live plays a crucial role in determining your health insurance costs. Urban areas, particularly major cities, tend to have higher medical treatment costs, which translates to higher insurance premiums. For example, London often sees higher premiums compared to other regions in the UK.

3. Coverage Level

The level of coverage you choose directly affects the cost of your health insurance. Basic policies are more affordable, while comprehensive plans with extensive benefits and additional options come at a higher cost.

4. Excess Amount

The excess amount, or deductible, is the portion of the medical costs you agree to pay out-of-pocket before your insurance kicks in. A higher excess typically results in lower premiums, but it’s important to ensure it remains affordable.

5. Consultant Access

According to recent research from myTribe Insurance, health insurers (including the popular Bupa) offer different options for accessing medical consultants. With Bupa, for example, you can choose “Guided Care” with a pre-approved list of consultants or opt for unrestricted access. Restricted access usually reduces the cost of your policy.

6. Hospital List

The choice of hospitals covered by your insurance policy can impact your premiums. High-end hospitals, especially in central London, charge more, leading to higher insurance costs.

7. No Claims Discount (NCD)

Insurers like Bupa offer a no-claims discount, rewarding policyholders with lower premiums for not making claims over a period. The discount increases with each claim-free year, up to a maximum limit.

How To Save On Health Insurance

Health insurance is a crucial investment in your well-being, but it doesn’t have to break the bank. By understanding how premiums are determined and taking proactive steps, you can significantly reduce your health insurance costs. Here are some practical strategies to help you save on health insurance:

1. Shop Around and Compare Plans

Not all health insurance plans are created equal. Take the time to compare different providers and plans to find the one that offers the best value for your needs.


  • Use Comparison Tools: Utilise online comparison tools to evaluate various health insurance policies based on coverage, cost, and customer reviews.
  • Consider Different Insurers: Look at both major providers like Bupa and smaller, local insurers. Sometimes, smaller insurers can offer competitive rates and personalised service.

2. Choose the Right Level of Coverage

Opting for the right level of coverage can make a big difference in your premiums. Assess your healthcare needs and choose a plan that provides necessary coverage without unnecessary extras.


  • Basic vs. Comprehensive Plans: If you’re generally healthy, a basic plan might be sufficient. For those with chronic conditions or higher medical needs, a more comprehensive plan may be more cost-effective in the long run.
  • Modular Plans: Consider modular plans that allow you to add or remove coverage options as needed.

3. Increase Your Excess

The excess (deductible) is the amount you pay out-of-pocket before your insurance coverage kicks in. Increasing your excess can lower your monthly premiums.


  • Calculate Affordability: Ensure the excess amount is affordable in case you need to make a claim. It’s a balance between lower premiums and manageable out-of-pocket costs.
  • Regularly Review: Adjust your excess periodically based on changes in your financial situation or health needs.

4. Utilise No Claims Discounts

Many insurers offer no-claims discounts that reward you for not making claims. This can significantly reduce your premiums over time.


  • Avoid Small Claims: Pay for minor medical expenses out-of-pocket to maintain your no-claims discount.
  • Preventive Care: Engage in preventive healthcare measures and regular check-ups to minimise the likelihood of needing significant medical treatment.

5. Review and Adjust Your Policy Regularly

Life changes and so do your health insurance needs. Regularly review your policy to ensure it still meets your requirements and is cost-effective.


  • Annual Review: Conduct an annual review of your health insurance policy to make necessary adjustments.
  • Life Changes: Update your coverage in response to significant life changes, such as marriage, childbirth, or changes in employment.

Understanding the factors that influence the cost of health insurance and implementing these savings strategies can help you find a policy that meets your needs without breaking the bank.

By making informed choices and taking advantage of available discounts, you can ensure you get the best value for your health insurance coverage.

Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.

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Jasmine Birtles

Your money-making expert. Financial journalist, TV and radio personality.

Jasmine Birtles

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