Health insurance costs keep climbing, but I’m afraid to drop the cover

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Dear Moral Money,

Our private medical insurance now costs more each month than our mortgage once did. Every renewal feels absurd, yet I then picture my husband needing treatment and me having to admit I cancelled the policy to save money.

We could afford the premiums, but I resent the feeling that we must keep paying no matter how high the price climbs, simply because the alternative is frightening.

We have both worked hard and paid tax and National Insurance all our lives. We also have the NHS, and we could pay for private treatment ourselves if needed. Surely that ought to give us confidence to stop the cover? Instead, I keep worrying about an unexpected bill.

My husband believes our health is the most important thing we have, and that is what our money is for. I agree with the first part, but I am less sure that it means we should accept every increase without question.

What troubles me most is that the older we get, the more expensive the insurance becomes. Just as I feel less willing to give it up, it takes a larger share of our retirement spending. I understand that older people are more likely to claim, but knowing the reason does not make the renewal any easier to stomach.

I would have preferred to pay more when we were younger, so the cost would feel more manageable now. Instead, I feel trapped between rising premiums and my fear of making a disastrous mistake.

Am I being sensible in wanting to cancel, or am I putting a price on our health that I will deeply regret?

– Anonymous

Dear Reader,

You are right to question the renewal. But I would not rush into cancelling in a panic.

I understand why your husband places health above wealth and sees this as money well spent. I feel much the same about private medical insurance. But that does not mean you should accept every price rise without asking what you are paying for, or whether the cover still suits your needs.

The awkward truth is that switching insurers can become more difficult as you grow older and accumulate more medical history. Depending on how an insurer underwrites an application, pre-existing conditions may be excluded from a new policy.

Even something that seems minor can matter. I once knew a client whose visit to a doctor about snoring, prompted by his sleep-deprived wife, resulted in a series of exclusions he had not expected.

That is only one example, not a rule across every insurer, but it shows why you should read the terms carefully before taking out a new policy or simply continuing with the one you already have.

Ask your insurer to explain the rise this year and whether any changes could reduce the premium. Depending on your policy, you may be able to increase the excess, cut outpatient cover, alter the hospital list, or choose a policy that requires you to use NHS services when waiting times are not too long.

Each option can change what you can claim, so ask for the trade-offs in writing. If you compare providers, make sure you understand the underwriting and any exclusions.

It may feel like a compromise to reduce cover or accept more limits, but you may simply be tailoring the policy to your needs. Not everyone requires comprehensive cover, especially if the cost is affecting other parts of life and you have emergency funds to handle unusual expenses up to a point.

Overinsurance can be wasteful, just as underinsurance can be a false economy.

Talk with your husband about what you want the policy to do. Is it mainly there for faster diagnosis and treatment? Do you want access to a particular hospital or consultant? Which costs could you comfortably cover yourselves, and which would leave you anxious or financially exposed?

Private medical insurance has limits and will not cover every condition or treatment. The NHS remains available for eligible treatment, and self-funding may be possible for some care; neither route makes every bill predictable.

You could also agree a health-spending plan for retirement. If you reduce the cover, decide in advance how much of the saving will go into a reserve for medical costs, and what you would do if treatment cost more than that. That turns “we might regret cancelling” into a practical question about the amount of risk you can live with.

Insurance is a strange kind of money. We hope it proves to have been wasted. A claim means something has gone wrong, whether the house has burned down, the car has been dented, or a worrying lump has been found. You are buying reassurance and help with costs, not a return on your premiums.

But reassurance still has to be worth paying for. Your health matters enormously, but that does not mean an insurer should have an unlimited claim on your retirement income. If keeping the policy means cutting spending that gives your retirement meaning, that matters too.

If you can afford the premium and value the access it provides, keeping it may be a sensible decision. If the price becomes too heavy, changing the cover or setting a firm limit may be sensible as well.

The wise choice is the one you make with your eyes open, after checking the alternatives and agreeing what you can afford. You do not have to prove you value your health by paying whatever you are asked.

All the best,