Health insurance - is it worth it? My numbers

galok

Whilst it's dependant on your personal circumstances and attitude to risk, when my health insurance policy renewal comes through, it's always at least a 10% increase from last year, until I call them to bring it down a bit. I'm usually torn on whether it's worth it but as a member of Vitality, I actually think more about the member benefits more than the actual health insurance, so here are my numbers breakdown and I would welcome feedback:

Summary Policy Cover: Fairly common one that includes: Day patient hospital fees, diagnostic tests, outpatient cover, major dental care, extended cancer cover, overseas medical care and travel insurance.

Profile: Male, early 30s, non-smoker, no medical conditions, no health claim made, no dependants

Costs: ~ £65 per month back in 2012, has steadily gone up to ~£85 per month or ~ £1,050 per year

**Benefits (estimated per year):**

1 free cinema ticket a week, assume it's worth £7 and I usually go 40 out of 52 weeks per year = £280

Half price Virgin Active gym, I like to swim and use the gym 2-3 times per week. Normally £70 per month, so £37.50 saving for 12 months = £450

50% off a pair of trainers at SweatShop, I normally buy ones on sale for about £40, so = £20

1 free Starbucks drink per week, assume it's worth £3 and I remember to claim 50 out of 52 weeks, = £150

Non-smokers cash back, £35 paid back each quarter = £140
** plus other product purchase benefits such as the Apple Watch discount, Evans cycle rebate etc which might or might not take up so I've excluded for conservative estimate**

So that's benefits totalling about £1,040 plus the insurance should I actually need it vs. £1,050 costs

My spreadsheet tells me it's worth it, but as the costs creep up each year whilst the benefits stay the same, it will get to the point where it's not worth it, then again I'm getting older and my probability of needing medical help increases, plus news of the NHS seems it's really struggling at the moment.

theoretica

The question is not just what you get 'if you remember to claim' your coffee and cinema tickets, but would you be spending that money on them and the snazzy gym anyway? Otherwise the health insurance people have cleverly persuaded you to buy some stuff you didn't want because it is a bargain. While laying out even more money on the 50% offers!

tensandunits_2

I would definitely keep some sort of medical insurance. A lot of people find out the hard way that the NHS can't or won't help them in their hour of need, and regret not having taken out private cover. And the best time to do that of course is when you're young and healthy (like yourself).

I wouldn't go too much by the free cinema tickets and the starbucks freebies, - just find an insurer who will insure you for actual healthcare.

Katiehound

If you were to use all those benefits , not the "maybe if you remember to use them" it might be worth it!
For example the foreign travel insurance might be a good thing if you were travelling abroad a lot..... I suspect you don't use that

Perhaps look at it this way:
How much have you paid out for private dental treatment ?(that's one expensive thing!)

To see the NHS GP and have tests, X-rays, vaccinations etc is free
If you wanted to jump the NHS queue to see a consultant would you be able to pay a consultation fee easily? I'm thinking around £100+

My swim / gym membership is £325 per annum or £33.50 by monthly DD- that's the local public leisure centre- very nice and includes all exercise/ pilates classes as well as swim, gym, sauna, steam room

Would you go to the cinema as often if you had to pay for the tickets?

Sounds like you just about break even.......

savingfortomorrow

go for a simpler policy as health insurance covering starbucks is plain strange! There are polices out there that focus on health not bells and whistles.

galok

Thanks everyone for your feedback. I normally go to the cinema most weeks and I was a member of a similarly priced gym (but no swimming pool) before. The Starbucks is a fringe benefit I wouldn't normally want unless I'm meeting someone in town.
I do want the health insurance in case the worse happens, I think I'll keep looking around and decide when the renewal comes in this Summer, online quotes from Axa and Bupa for similar cover are about ~ £70 per month but I'm assuming like Vitality, they start bumping their prices up as soon as you are with them for a year.

galok

Katiehound wrote: »

If you were to use all those benefits , not the "maybe if you remember to use them" it might be worth it!
For example the foreign travel insurance might be a good thing if you were travelling abroad a lot..... I suspect you don't use that

Perhaps look at it this way:
How much have you paid out for private dental treatment ?(that's one expensive thing!)

To see the NHS GP and have tests, X-rays, vaccinations etc is free
If you wanted to jump the NHS queue to see a consultant would you be able to pay a consultation fee easily? I'm thinking around £100+

My swim / gym membership is £325 per annum or £33.50 by monthly DD- that's the local public leisure centre- very nice and includes all exercise/ pilates classes as well as swim, gym, sauna, steam room

Would you go to the cinema as often if you had to pay for the tickets?

Sounds like you just about break even.......

This was really handy, thanks

indiepanda

galok wrote: »

Thanks everyone for your feedback. I normally go to the cinema most weeks and I was a member of a similarly priced gym (but no swimming pool) before. The Starbucks is a fringe benefit I wouldn't normally want unless I'm meeting someone in town.
I do want the health insurance in case the worse happens, I think I'll keep looking around and decide when the renewal comes in this Summer, online quotes from Axa and Bupa for similar cover are about ~ £70 per month but I'm assuming like Vitality, they start bumping their prices up as soon as you are with them for a year.

I used to work for a health insurer (not Vitality) and it's pretty much inevitable premiums go up every year for two main reasons, first that risk of claiming increases with age and second that medical inflation tends to be quite high compared to the standard rate of inflation - new treatments come out and people expect them to be covered by their policy - and some of them are really quite expensive, like some of the cancer drugs.

The other issue health insurers have is that every year some people lapse their policies and it's usually the healthy ones that haven't claimed that are more likely to lapse as they decide they aren't getting value for money. So unless they are attracting enough new healthy policyholders to compensate for this, as the years go by the group of people they cover is gradually getting less healthy, so they need to charge everyone more.

The Vitality product was meant to counteract this as those who really engage with the program - lots of gym visits etc - tend to get healthier and like the bells and whistles on the policy and so don't feel as if their money is being wasted if they don't claim so more likely to retain their policy. I haven't seen data from the UK to prove it worked over here, but the South African company who originally developed the idea had data from their South African company that proved it was working down there on average (i.e. not everyone got healthier, but enough did to compensate for those that were not).