What Is Private Health Insurance and How Does It Work?

Private medical insurance is a policy that pays for private healthcare when something new goes wrong with your health. You pay a monthly or annual premium. In return, the insurer funds eligible private consultations, diagnostic tests and treatment, up to the limits of your policy.

The word that matters most is acute. An acute condition is one that is expected to respond to treatment and get better, such as a hernia, a torn ligament or gallstones. A chronic condition is one that needs ongoing, long-term management, such as diabetes or asthma. UK health insurance is built around treating acute conditions, while routine management of chronic conditions generally remains with the NHS.

Think of it like breakdown cover for your health. It exists to fix problems that appear, not to fund the routine servicing you need year in, year out.

Every policy has standard exclusions, and they are broadly consistent across UK insurers:

• Chronic conditions: ongoing management of long-term illnesses such as diabetes or high blood pressure.
• Emergencies: accident and emergency care is handled by the NHS. Private hospitals are not set up for blue-light admissions.
• Pre-existing conditions: anything you already had when you took the policy out, at least initially. The underwriting section below explains how this works.
• Routine pregnancy and childbirth: normal maternity care is excluded, although some plans cover certain complications.
• Cosmetic treatment: procedures with no clinical need.
• Routine dental and optical: excluded unless you add a specific benefit for them.

Exclusion lists differ in the detail, so we always check the policy wording against what actually matters to the client. If a specific concern is driving your purchase, tell your adviser so the right policy can be matched to it.

Underwriting is how the insurer decides what your medical history means for your cover. There are two main routes.

Neither route is better in every case. Moratorium suits people who want cover quickly and expect old issues to stay resolved. Full medical underwriting suits people who want certainty. We cover the trade-offs in detail in our moratorium vs full medical underwriting guide, and if you have a medical history worth discussing, start with our guide to pre-existing conditions.

The claims process is more straightforward than most people expect, and it usually follows the same four steps:

• 1. See a GP. Most insurers ask for a GP referral before authorising specialist care. Many policies include a virtual GP service that can assess you and, where appropriate, provide the referral. A few insurers run their own assessment pathways for certain specific concerns, but specialist treatment normally follows a referral.
• 2. Contact your insurer. Before booking anything, you call the insurer or use their app to get the claim pre-authorised. They confirm what is covered and issue an authorisation number.
• 3. Book your specialist. You choose a consultant and hospital recognised under your policy and book the appointment.
• 4. The insurer pays directly. Eligible bills are normally settled between the hospital and insurer. You only pay your excess and anything outside the policy terms.

Pre-authorisation is the step people skip at their cost. Booking treatment before the insurer confirms cover is the most common avoidable claims problem we see. Our step-by-step claims guide walks through the process in full.

You can buy direct from an insurer, but you will only ever see that insurer’s products. An independent broker compares plans from across the market, matches underwriting to your medical history and handles the paperwork at application, renewal and claim. Broker advice is free to you because the insurer pays the broker a commission, and using a broker does not normally make your premium higher.

We are FCA-authorised, independent and based in London, and we advise individuals, families and businesses across the UK. If you want to understand the difference this makes, read our guide on brokers vs going direct, or see how the leading providers stack up in our best private health insurance comparison.