A £0 excess policy pays from the first pound of a claim, but typically costs around 10–20% more than the same cover with a £250 excess — roughly £100–£190 a year on an average adult premium. Since most policies charge the excess once per policy year, no-excess only wins if you claim most years. For occasional claimers, taking an excess is usually better value.
- ✓Each step down the excess ladder (£500 → £250 → £100 → £0) typically adds 10–20% to the premium.
- ✓On most policies the excess applies once per policy year — not to every claim.
- ✓No-excess pays off only if you claim most years; occasional claimers fund it for nothing.
What a no-excess policy actually changes
The excess is your contribution to a claim before the insurer pays the rest — and on most UK policies it's charged once per policy year, not per claim (a minority of plans differ, so check the wording; our excess guide covers the mechanics). Set it to £0 and the insurer funds every claim from the first pound: no invoice from the hospital, no top-up, nothing to pay at the point of care.
That convenience is real. What it isn't is free: the excess is one of the main levers insurers use to price a policy, and removing it moves the premium every single year — whether you claim or not. The question this page answers is purely arithmetical: does the certainty of paying more every year beat the possibility of paying an excess in the years you claim?
It's worth being clear what the excess is for from the insurer's side, because it explains the pricing. A £250 excess does two jobs: it trims the insurer's payout on every claim, and — more importantly — it quietly discourages the small claims that are expensive to administer relative to their size. Remove it, and the insurer expects both higher payouts and more frequent claims from you. The 10–20% uplift isn't a penalty; it's the actuarial price of your changed behaviour.
The break-even maths
Here's the comparison over five years for a policy averaging £960 a year with a £250 excess, versus the same cover with no excess at a 15% uplift (illustrative — get real quotes for your own numbers, as the uplift varies by insurer).
| Claiming pattern (5 years) | £250 excess: total cost | £0 excess: total cost | Winner |
|---|---|---|---|
| No claims | £4,800 | £5,520 | £250 excess, by £720 |
| Claims in 1 year of 5 | £5,050 | £5,520 | £250 excess, by £470 |
| Claims in 2 years of 5 | £5,300 | £5,520 | £250 excess, by £220 |
| Claims in 3 years of 5 | £5,550 | £5,520 | £0 excess, narrowly |
| Claims every year | £6,050 | £5,520 | £0 excess, by £530 |
The pattern is robust across realistic assumptions: the break-even sits at claiming in roughly three years out of five. Below that, the excess saves money; above it, no-excess wins — and the higher the percentage uplift your insurer charges for £0, the more often you'd need to claim to justify it. Note the maths compares the same excess applied once per year; on the minority of policies charging per claim, frequent small claims shift the sums toward £0 faster.
Price every rung of the excess ladder
Who genuinely benefits from no excess
The arithmetic points to a specific profile: people who use the policy most years. In practice that tends to mean families with children (multiple members multiply the chance someone claims), people with full outpatient cover who see consultants or physios regularly for new conditions, and anyone who's honest with themselves that they'll use private care readily rather than reluctantly.
For the opposite profile — the healthy buyer holding cover as protection against the big, rare event — the excess is close to irrelevant in the moment it matters. Against a £13,000–£16,000 knee replacement or a five-figure cancer pathway, a £250 excess is noise. Paying 10–20% more every year to shave £250 off a claim you hope never to make is upside-down insurance: you're insuring the pound coins and paying for it in notes.
How to decide: three questions
- How often will you realistically claim? Look at the last five years. Fewer than three claim-years in five: take an excess (and consider £250–£500). More: price up £0 seriously.
- Does your policy have an NCD? If small claims already cost you renewal tiers, a £0 excess mainly smooths big-claim years — worth less than it looks. On community-rated or no-NCD plans, it's worth more.
- Would a £250 bill in a claim year actually hurt? If yes, buying certainty with a modest uplift is a legitimate choice, not a maths error — insurance exists to convert uncomfortable lumps into comfortable drips. Just make it knowingly.
And compare across insurers, not just within one: because the uplift for £0 excess varies (and some insurers price the ladder more steeply than others), insurer A with a £100 excess sometimes beats insurer B at £0 for near-identical cover. That's a broker-shaped problem — whole-of-market comparison finds it in minutes. Our guides on cutting costs and comparing properly put the excess decision in context.
Frequently asked questions
How much more does health insurance with no excess cost?
Typically around 10–20% more than the same policy with a £250 excess, since each step along the excess ladder (£0, £100, £250, £500) moves the premium by roughly that much. On the UK average adult premium of about £80 a month, expect £0 excess to add roughly £100–£190 a year versus a £250 excess. The exact uplift varies by insurer, age and plan.
Is a no-excess health insurance policy worth it?
Only if you claim most years. The break-even sits around claiming in three years out of five: below that, you pay more in guaranteed premium uplift than you'd ever pay in excesses. It suits families and frequent outpatient users; for healthy buyers holding cover against big rare events, a £250 excess is noise against a five-figure claim and the saving compounds annually.
Who should choose £0 excess on health insurance?
The profile the maths supports: households where someone claims most years — typically families with children, people with full outpatient cover who use consultants and physio regularly for new conditions, and anyone who knows they'll use the policy readily. Also anyone for whom an unpredictable £250 bill would genuinely sting; buying that certainty is legitimate if done knowingly.
Does no excess mean I pay nothing at all when I claim?
For covered treatment, essentially yes — the insurer pays from the first pound and the hospital bills them directly. You can still face costs the policy itself doesn't cover: treatment beyond your outpatient limit, a consultant charging above the insurer's fee schedule, non-covered extras, or care for excluded conditions. No excess removes your contribution, not the policy's boundaries.
How does a no-claims discount interact with a no-excess policy?
Awkwardly. Many insurers run NCD scales up to around 65–70%, and claiming can drop you two or three tiers at renewal — often costing more than a small claim paid out. A £0 excess makes small claims frictionless, but the NCD penalty still applies, so the real cost of a minor claim survives. On NCD-rated policies, no-excess delivers less practical benefit than the label suggests.
Is it better to have a £100 excess or no excess on health insurance?
£100 is the halfway house: a modest premium saving versus £0, and a trivial sum in any claim year. If you claim often, £0 versus £100 rarely differs by enough to matter either way. The bigger gains sit further along the ladder — £250 or £500 excesses unlock the 10–20%-per-step savings that compound over years. Price all the rungs, then decide.
Do all insurers offer a £0 excess option?
Most major UK insurers let you set the excess to zero on individual policies, but the price of doing so varies significantly between them — some price the excess ladder steeply, others gently. That's why the same person can find insurer A at £100 excess cheaper than insurer B at £0 for similar cover. Compare the option across insurers rather than within one.
Does the excess on health insurance apply per claim or per year?
On most UK policies, once per policy year: your first claim absorbs the excess and later claims that year are paid in full, which weakens the case for £0 excess — the worst case is one £250 payment annually. A minority of plans charge per claim or per condition, where frequent claimers benefit more from £0. Check your policy wording; it changes the maths.
Should I remove my excess as I get older?
Age cuts both ways. Claims become more likely, pushing toward £0 — but premiums also rise with age, so a 10–20% uplift costs more in cash terms each year, and NCD protection matters more too. Many older policyholders do the opposite: raise the excess to keep the premium sustainable, accepting a known £250–£500 in claim years to stay covered for the five-figure events.