Health insurance: what it is, what it covers, how much it costs, and how to choose in 2026
Health insurance (or medical insurance) complements the NHS and gives you faster access to consultations, tests, hospital admissions, and services in private or network facilities. Policies may be structured on a reimbursement or cash benefit basis, with limits, deductibles, and co-insurance set according to the contract. Before you sign, review carefully the waiting periods, pre-existing conditions, and the provider network.
What is a health insurance policy and how does it work?
A health insurance policy reimburses (or pays a cash benefit for) medical expenses arising from illness or accident. In practical terms, you can:
- use direct billing at network facilities (you pay only any applicable deductible/co-insurance);
- request reimbursement of eligible costs you have paid upfront, in line with the limits and timelines set out in the policy.
Reimbursement vs cash benefit (with a clear example)
- Reimbursement: the insurer reimburses eligible costs up to the policy limit, net of any deductibles and co-insurance.
- Cash benefit: you receive a fixed amount when the insured event occurs (e.g., a daily hospitalisation allowance).
- Example: procedure €4,000; per-event limit €10,000; deductible €100; co-insurance 10%. Reimbursement = 4,000 − 100 − (10% of 3,900) = 510 €.
Provider network and direct billing
The provider network enables faster bookings and direct settlement by the insurer with the facility. Out of network, you claim reimbursement by submitting the required documentation.What does it cover (and what does it not cover)?
Depending on the plan selected, a health insurance policy may include:
- Hospitalisation and surgery (inpatient stay, operating theatre, medical team, pre-/post-operative tests).
- Specialist consultations and diagnostic tests (including day-hospital).
- Prescribed medicines, physiotherapy and rehabilitation.
- Preventive care (check-ups) and telemedicine (video consultations, prescriptions).
- Dental care and optical benefits (often as optional add-ons).
Hospitalisation and major procedures
This is the core of health insurance policies. Check the per-event/annual limits, any private room entitlement, which complications are covered, and the authorisation timelines.Consultations, tests, medicines and rehabilitation
Many policies provide dedicated allowances for consultations and diagnostics; in some cases, reimbursement of the NHS co-payment is also included. Verify per-service caps and the supporting documents required.Prevention, dental care and telemedicine
More advanced plans include regular check-ups, hygiene/fillings with dedicated limits, and telemedicine for rapid consultations. Assess how often you will use these benefits to determine whether they offer value.Exclusions, waiting periods and pre-existing conditions
- Waiting periods: an initial period during which certain benefits are not covered (e.g., 30–90 days).
- Pre-existing conditions: existing conditions may be subject to limits/exceptions.
- Deductibles/co-insurance: your share of costs for consultations and diagnostics.
- Specific limits: reduced limits for dental/optical benefits or major procedures.
Quick coverage table (text format)
- Hospitalisation/surgery: Yes — per-event/annual limits; “major procedures” option.
- Consultations/diagnostics: Yes — per-service limits; possible reimbursement of NHS co-payments.
- Medicines/rehabilitation: Yes/Partial — often bundled in packages.
- Dental/optical: Optional — dedicated limits and waiting periods.
- Telemedicine/prevention: Included in enhanced plans — video consultations and check-ups.
How much it costs: key drivers and typical scenarios
The premium depends on age, health status, limits, deductibles/co-insurance, add-ons (e.g., dental/overseas), and the quality of the network. In general:- a hospitalisation-only plan costs less but covers major events;
- a comprehensive plan (hospitalisation + consultations/diagnostics) costs more but reduces recurring out-of-pocket expenses;
- telemedicine and prevention are often included at higher tiers.
Tax relief: 19% in the 730 tax return
For standalone illness policies, a 19% tax deduction is generally available in the tax return, within the limits set each year. Always check the latest tax guidance and the nature of your contract.Request your personalised policy
Abroad, travel insurance and LTC
If you travel frequently, check the overseas cover: some plans have dedicated limits. For short trips, a travel insurance policy with repatriation and a 24/7 medical assistance centre can sometimes be the better option. Long Term Care (LTC) does not replace health insurance: it pays a benefit in cases of loss of independence (ADL) and covers long-term needs.How to choose: a 7-step checklist
- Set your priorities: hospitalisation vs frequent consultations/diagnostics.
- Choose limits appropriate for major procedures.
- Compare deductibles and co-insurance for outpatient access.
- Check waiting periods and rules on pre-existing conditions and the health questionnaire.
- Review the provider network near home/work.
- Consider useful add-ons: telemedicine, prevention, dental/optical.
Frequently Asked Questions (FAQ)
What is the difference between reimbursement and cash benefit?
Reimbursement covers eligible costs you have incurred, up to the policy limits and net of any deductibles/co-insurance; a cash benefit pays a pre-agreed amount when the insured event occurs.
What is the average cost of a health insurance policy?
It depends on age, health status, policy limits, deductibles, and included benefits. The difference between entry-level and premium plans can be substantial.
Does the policy also cover you abroad?
Often yes, with dedicated limits and conditions; for short trips, a separate travel insurance policy may be more cost-ef
What are waiting periods, deductibles and co-insurance?
Waiting period: an initial period during which certain benefits are not covered. Deductible: a fixed amount payable by you. Co-insurance: a percentage of the cost payable by you.
Can I claim the premium as a deduction in my 730 tax return?
Generally yes for standalone illness policies: a 19% tax deduction is available, within the limits set for the tax year. Always check the latest guidance.