What's driving the surge in UK private health insurance?

Yahoo

19-03-2025

In recent years, a trend has emerged across the UK where nearly one in eight Britons now have private medical insurance. Yahoo Finance UK spoke to LifeSearch CEO Debbie Kennedy to shed light on what is driving this growing reliance on private healthcare.
With NHS waiting lists stretching into months and families increasingly anxious about timely access to medical services, Kennedy explains that many are turning to private insurance not just as a safety net for hospital treatment, but as a proactive way to ensure quicker access to primary care, diagnostics and even mental health services.
Kennedy highlighted some striking figures during the interview. According to industry data from 2023, approximately 4.7 million people in the UK had private medical insurance, with more than 400,000 new policies taken out in that year alone.
'There has been a surge,' Kennedy noted. 'We are all acutely aware of the strain on the NHS – not just the 18-month waiting lists for operations, but the everyday challenges of getting GP appointments and prompt diagnoses.'
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For many, the decision to secure private cover is about more than just emergency treatments. It's about ensuring that when a health concern arises — whether it be a persistent ailment, a sudden injury or even mental health issues – there is a faster, more accessible route to care.
As Kennedy explained, the issue isn't solely about what happens if one is admitted to hospital. 'It's more about, how do I get to see someone to talk about a concern I have? How do I get a diagnosis?'
This sentiment has resonated with a growing number of individuals who see private insurance as a means to bypass some of the bureaucratic delays in the public healthcare system.
With the NHS facing ever-increasing demand, the appeal of being able to consult a GP quickly, access early screening tests, or receive specialist care without long waiting times has never been higher.
Kennedy noted that private insurers are evolving to meet modern healthcare needs. 'Insurers are now developing better products,' she explained.
'It's not just about gold-plated employee schemes anymore. There are products with everyday benefits that cater to a range of needs – from physiotherapy and fracture cover to mental health support, including talking therapy sessions.'
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This evolution in product offerings means that private medical insurance is becoming accessible to a broader spectrum of the population. Consumers today can choose policies that fit their budget without sacrificing essential benefits.
Kennedy stressed the importance of shopping around and doing thorough research. 'It is important to shop around, do the research and yes, do ask an adviser if you want help on this,' she advised.
Despite the growing popularity of private medical insurance, many consumers still harbour concerns about claims and payouts. Kennedy acknowledged these fears, noting that it is a common worry among potential policyholders. 'I even have family and friends say the same to me, 'Oh, but I bet you won't ever pay out," she added.
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To address this scepticism, Kennedy pointed to claims statistics that reveal over 98% of claims are paid out – a figure that underscores the reliability of these products.
'When you look at the claim statistics for our industry and life insurance protection, it's clear that we do pay out,' Kennedy said. She added that this data comes from figures provided by the Association of British Insurers, which has mandated transparency across the board.
At the end of the day, you might have your policy for 10 to 15 years before you need to use it,' Kennedy explained. 'It is essential that you have confidence that it will work.'
In today's digital age, Kennedy said that efficiency and ease of access are paramount. While many industries are being transformed by technology, the life insurance sector has been somewhat slow to embrace these changes. Kennedy, however, sees a bright future where technology and human service are seamlessly integrated.
'Customers want to do things online, and they want to do it easily,' she observed. Yet the digital experience isn't simply about digitising paper forms – it's about creating smarter, more intuitive journeys that guide customers through the often complex process of taking out a policy. Kennedy envisions a future where digital platforms not only facilitate transactions but also provide timely human support.
'If someone needs reassurance or advice during the application process, they should be able to speak to a real advisor,' she emphasised.
Often, discussions about insurance tend to focus on older demographics, under the assumption that younger individuals are at lower risk. Kennedy, however, challenges this notion, arguing that even those in their 20s and 30s stand to benefit significantly from taking out insurance policies early.
'Many young people think, 'My risk of dying is probably low,' but in your 30s, you're actually eight times more likely to have an accident and be off work for at least two months than to die,' she explained.
The financial implications of a prolonged absence from work can be severe – ranging from loss of income to difficulties in managing everyday expenses. This is where income protection or sick pay cover becomes critically important.
Moreover, younger policyholders often benefit from lower premiums since rates are largely age-dependent and many will be in good health when they first take out a policy. Kennedy also highlighted the flexibility of modern policies that can adapt as one's life circumstances change. Whether it's securing a mortgage, starting a family or changing jobs, the benefits embedded in these policies can be adjusted without the need to reapply.
'It's about looking beyond the death benefit,' she explained. 'There's a suite of benefits that make these policies relevant to a younger audience.'
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For those contemplating private medical insurance, Kennedy offers some prudent advice.
First and foremost, consumers should conduct thorough research and compare products across different insurers. 'It is important to shop around and ask for advice,' she stressed. The variety in products means that there is likely a policy that can be tailored to individual needs and budgets.
Additionally, transparency in claims processing is crucial. By understanding the performance of the industry – backed by figures from the Association of British Insurers – consumers can gain further insight about whether insurers will honour claims when it matters most.