What Is Health Insurance?

What Is Health Insurance?, More than Money

In this article I’m going to be asking “What is Health Insurance?”.

What does it cover?

And do you need it?

You’ll probably want to read this alongside my article ‘How Much Does Health Insurance Cost?’ so that you can get a full overview and decide what is going to be the most cost-effective plan for you and your family.

Just sayin’.

Put simply, Health Insurance is a policy that will pay out for any private health care you receive and covers medical, surgical, and sometimes dental expenses. 

Health Insurance will either reimburse you for any private health care costs, or it will pay the medical care provider directly. 

You can take out a policy that covers yourself, or you and a partner. Some policies cover entire families, and some policies are included in your benefits package with your employer. 

I’m going to look at all those options in this article. 

Of course, we have all relied on the NHS at some point in our lives, and no one’s denying they do a grand job.

Because they do.

But what are some of the benefits of taking out private Health Insurance, besides much better food and (whispers) wine lists?

1. You will have a wider choice of treatment options

2. The possibility of shorter waiting times

3. Access to more comfortable hospital accommodation

What Does Health Insurance Cover?

Health Insurance covers a number of healthcare-related costs, but the level of cover you get will depend on the policy you take out. 

For example:

Basic Health Insurance Cover 

As the name suggests this type of policy covers the basics and pays for treatment and related costs while you are an inpatient (occupying a bed) at the hospital. 

There is also often an element of cover included for cancer treatment. This is the cheapest Health Insurance option

Medium Health Insurance Cover 

This type of policy covers outpatient (not needing a bed) care as well as inpatient care, including blood tests, scans, and specialist consultations.

Comprehensive Cover 

Again, the name says it all; a comprehensive Health Insurance policy will cover all the things a basic and medium policy will, as well as any extra treatment you might need, such as physiotherapy. 

This is the most expensive Health Insurance option – which probably doesn’t come as much of a surprise.

As I said at the beginning of this article, you can take out a policy that just covers yourself, or you and a partner, or your whole family. 

Let’s look at all those options in a bit more detail. 

What Is Individual Health Insurance?

Individual Health Insurance allows you to claim for the cost of private medical care and is useful if you want to avoid some of the NHS’s more stressful drawbacks. 

So, do you need it? 

Well as I said earlier it can give you access to a wider range of treatments and give you a choice of where you are treated, you can even request your own private room in an NHS hospital.

In all honesty, whether you need it depends on whether or not those things are going to be a priority to you in the event of you needing hospital treatment. 

It’s worth knowing that you can still use the NHS when you have Health Insurance, so you’ll still be entitled to free treatment from your GP and at A&E.

But having insurance means you may be able to bypass waiting lists and queues if you need an operation or further diagnosis. 

Is Health Insurance the Same As Having Critical Illness Cover?

To put it bluntly, no. Although they both relate to health and medical treatment, they are very different. 

Health Insurance will cover the cost of medical treatment needed to make you healthy again. 

Critical Illness Cover pays out a tax-free one off cash payment if you’re diagnosed with an illness, it’s up to you what you do with the money…

What Does Health Insurance Cover?

As I said earlier, it depends on the level of insurance you take out; basic, medium, or comprehensive.

 As a rule, Health Insurance typically covers doctor and hospital visits, prescription medications, wellness care, and medical devices.

Some policies will allow you add some or all the following:

  • Dental care
  • Eye care
  • Physiotherapy
  • Homeopathy
  • Maternity and pregnancy care
  • Mental health support

Are There Any Exclusions When It Comes To Health Insurance?

Again, it depends on your policy, but there are certain conditions or costs that it’s likely your policy won’t cover. For example:

  • Treatment for chronic illnesses such as diabetes, arthritis and high blood pressure
  • Cosmetic treatments
  • Mobility aids
  • Infertility treatments
  • Organ transplants

What Other Limitations Are There With Health Insurance?

1. Waiting Times  

For serious illnesses your waiting time might not be a lot less than they would be at an NHS hospital

2. No Guarantees on Places or Rooms 

Having private Health Insurance doesn’t guarantee you a place in a private hospital or a private room in an NHS hospital. 

It will always be subject to availability – an occupied room is occupied

What Is Joint Health Insurance?

This is a type of insurance policy you can take out to cover both you and your partner against the cost of any private medical treatment. 

Who said romance was dead? 

What Are the Benefits of A Joint Health Insurance Policy?

Your policy choices are the same as for an individual taking out Health Insurance, and you will be covered for the same things. 

The main advantage to having joint cover with a spouse or partner is only having one policy to deal with; one monthly or yearly bill, and one point of contact if you need to make a claim. 

Also, a joint policy can be considerably cheaper than taking out two separate policies. 

What Are The Disadvantages Of A Joint Policy?

Your limitations with a joint insurance policy are the same as if you had taken out the policy by yourself. 

There are the same medical exclusions, as well there being no guarantee of private rooms or shorter waiting times.

What Is Family Health Insurance?

Family Health Insurance is Health Insurance that covers the whole family. 


Your benefits and limitations are the same as those for single or joint policies, and your premium costs will depend on the level of cover you take out. 

Family Health Insurance policies are often taken out by parents who would like to reduce the stress should a little one need to stay in hospital.

Private rooms allow the family to all stay together, rather than being on a communal ward, and some policies might include hospital accommodation for a parent if a child has to stay overnight or longer. 

What About Insurance as An Employee Benefit?

These Health Insurance policies are chosen by an employer and offered to employees, and maybe their dependents. 

Depending on the type of policy that has been chosen, your advantages and disadvantages are going to be the same as if you had taken out your own individual Health Insurance policy, although there are some extra advantages:

1. The cost of the premiums is often split between you and your employer

2. You won’t have to do any of the work involved in choosing the plan or the options – it’ll all be done for you

3. The payments you make into your plan aren’t taxable, so it will lower your taxable income

And so there you have it, Health Insurance isn’t one of life’s necessities, but having those extra benefits there should the NHS fall short can give great peace of mind – particularly if it is your loved ones who need treatment


I’m More Than Money’s Income Protection and Business Protection Insurance expert, I started my career in finance 8 years ago. I’ve gone from advising on insurance in my home county of Kent, to working in the big city of London. I started More Than Money with my Dad and Brother, to get away from the 'sales environment'. When you're a qualified Adviser, the quality of your advice has to come first, not a 'sale on the board'. I thought, if I cant find that environment elsewhere, well i'll create it myself.

Leave a Reply

Social media & sharing icons powered by UltimatelySocial