Should I get private health insurance, or use the NHS?

This content is for information and inspiration purposes only. It should not be taken as financial or investment advice. To receive personalised, regulated financial advice please consult us here at Elmfield Financial Planning in Padiham, Burnley, Lancashire.

The NHS is under great strain at the moment. A&Es are turning away ambulances, with over a quarter of ambulances waiting 30 minutes (or more) to deliver patients to hospitals. Partly, the situation has been driven by surging hospitalisations from COVID-19 – which has also caused thousands of staff sick absences. Given these figures, many clients in Padiham, Burnley and across Lancashire are wondering if private medical insurance (PMI) is worth taking out. Below, our team at Elmfield Financial Planning explains how PMI works, where it can fit into a wider financial protection plan and some potential pitfalls to take note of.


How does private health insurance work?

Similar to life cover, private medical insurance is a policy that you pay premiums into each month in exchange for a later payout. The difference is that life insurance pays out if you die within the policy terms, whilst PMI can provide payments to help cover the cost of private medical care if you become ill or injured.

However, many people misunderstand what PMI covers. Generally, it provides financial support for non-routine tests and treatment for acute conditions. If you have a condition that is deemed “serious”, chronic or incurable and which pre-existed your policy (like arthritis), then this likely will not be covered. Other policies such as critical illness cover can sometimes provide financial support for health conditions not typically covered by PMI. 

For instance, certain cancer diagnoses may be defined as an “acute medical condition” by your PMI insurer. However, others might not – although they could fall under the terms outlined by a critical illness cover policy. Here, it may be worth talking to a financial planner to make sure you take out the right policy (or policies), particularly if your family has a history of particular health conditions – such as heart disease.


The pros & cons of PMI in a Covid world

With the NHS struggling to meet patient demand across the country, PMI can open up doors to get private treatment quickly if the need arises. However, bear in mind that going private does not always result in faster treatment if you get a serious illness. You are also still likely to use the NHS for many routine services and A&E. 

Regarding COVID-19, presently there are still certain private clinics offering to test. However, PMI insurers will generally not cover the costs in asymptomatic cases or if you need to test before travelling. Some insurers will provide cover for testing if a test is required as part of the claim process, but this varies across insurers and you should check the wording carefully.

One great benefit of private treatment is that you are more likely to have access to a specialist for certain treatments (e.g. rare diseases). You may also have more freedom over where, when and with whom you get your treatment. There is typically more availability for private rooms and wards, and PMI also gives the security that you will not be placed on a “non-urgent” waiting list.


Financial planning considerations

If you are interested in PMI, then it is important to first check whether your employer offers any private healthcare benefits. Perhaps your contract offers cover that is discounted compared to the plans you have found on the market (due to firms’ abilities to bulk-buy). However, you may need to pay tax on this benefit, and you likely will not be able to continue your membership of the employer PMI scheme if you leave your job.

The cost of paying for monthly PMI premiums – and the excess on any potential future claims – needs to be weighed against the option of building your own fund to pay for private treatment. This latter option would allow you to keep the cash if you never end up making a claim, but the value of the savings will likely be eroded over time (especially right now, with inflation at 9.1%). However, bear in mind that it will likely take years to build up the fund. 

Even if you save £1,000s, this may not stretch to cover many expensive treatments. A knee or hip replacement, for instance, costs an average of £11,398. One idea to explore with a financial adviser is to combine PMI (with a high excess) with building up your own fund. This could allow you to pay for less costly private treatment out of your own savings, whilst allowing you to pay for a cheaper policy which covers you for more expensive treatment.

Finally, whatever you decide about PMI, make sure it integrates with your wider financial plan and protection policies. Most people will be unable to afford the best policies for life insurance, income protection, critical illness cover and PMI all at once. As such, it will be important to prioritise and build the best protection plan given your goals, budget and financial situation. A financial planner can help you make informed decisions here, based on the best information.



If you are interested in starting a conversation about your own financial plan or investments, then we’d love to hear from you. Please contact us to arrange a free, no-commitment consultation with a member of our team here at Elmfield Financial Planning in Padiham, Burnley, Lancashire. 

Reach us via: 

T: 01282 772938