Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to johnstevens77,Bhoddhisatva,scotia,Anonymous,Cornytiv34, for Donating to support the site

Health insurance or self-insure?

Including Financial Independence and Retiring Early (FIRE)
pbarne
Lemon Pip
Posts: 52
Joined: November 4th, 2016, 7:03 pm
Has thanked: 15 times
Been thanked: 4 times

Health insurance or self-insure?

#418803

Postby pbarne » June 11th, 2021, 11:29 am

I am also (noting other recent threads) on a last-month count-down to retirement.
I have mostly sorted out an initial strategy for decumulation, but one area where I feel I'm lacking clarity is on continuing / taking out health insurance vs. setting aside a pot of money to self-insure for anything above and beyond what the NHS will provide. I would be very interested in how others have dealt with this.
Thanks,
Paul

scrumpyjack
Lemon Quarter
Posts: 4811
Joined: November 4th, 2016, 10:15 am
Has thanked: 605 times
Been thanked: 2675 times

Re: Health insurance or self-insure?

#418807

Postby scrumpyjack » June 11th, 2021, 11:39 am

pbarne wrote:I am also (noting other recent threads) on a last-month count-down to retirement.
I have mostly sorted out an initial strategy for decumulation, but one area where I feel I'm lacking clarity is on continuing / taking out health insurance vs. setting aside a pot of money to self-insure for anything above and beyond what the NHS will provide. I would be very interested in how others have dealt with this.
Thanks,
Paul


Having had health insurance paid by my firm, on retirement I decided not to insure. It is likely that on average you will be better off investing and paying with your own money rather than insuring because normally about half your premiums will go in the costs of insurance excluding claims. I took the view that the sort of things the insurance would cover (hip replacement etc) would not break the bank and the more serious problems the NHS usually deals with well (heart surgery, eye surgery etc both of which I have had).

It has turned out as I had expected. I have spent a lot on private medial treatment but I think the premiums of health insurance over the last 15 years would have been a lot more.

It depends really if, when push comes to shove, you can pay up £20k if needed from your own resources or if the thought of that is unbearable you'd better go for the insurance.

jonb1950
Posts: 14
Joined: November 7th, 2016, 9:07 am
Has thanked: 32 times
Been thanked: 5 times

Re: Health insurance or self-insure?

#418844

Postby jonb1950 » June 11th, 2021, 1:59 pm

scrumpyjack wrote:
Having had health insurance paid by my firm, on retirement I decided not to insure. It is likely that on average you will be better off investing and paying with your own money rather than insuring because normally about half your premiums will go in the costs of insurance excluding claims. I took the view that the sort of things the insurance would cover (hip replacement etc) would not break the bank and the more serious problems the NHS usually deals with well (heart surgery, eye surgery etc both of which I have had).

It has turned out as I had expected. I have spent a lot on private medial treatment but I think the premiums of health insurance over the last 15 years would have been a lot more.

It depends really if, when push comes to shove, you can pay up £20k if needed from your own resources or if the thought of that is unbearable you'd better go for the insurance.


I agree with Scrumpyjack. For many years I had private health cover provided by my employer. I took redundancy in 2006 and set up as a consultant. I was offered the opportunity to keep private health cover, with any pre-existing conditions covered. I kept paying the premiums for some years, essentially while I was still dependent on the consultancy income. The premiums went up from year to year of course. On at least one occasion I accepted a reduced level of cover to reduce the premiums. Eventually it no longer made sense to continue, but rather to self-fund if it became necessary. It seemed a big decision at the time, but I have no regrets. We must have saved enough in premiums now to cover the cost of a hip or knee replacement.

pbarne
Lemon Pip
Posts: 52
Joined: November 4th, 2016, 7:03 pm
Has thanked: 15 times
Been thanked: 4 times

Re: Health insurance or self-insure?

#418875

Postby pbarne » June 11th, 2021, 4:19 pm

Thanks for the replies scrumpyjack and johnb1950.

There are endless posts and articles from the US on the topic of choosing health insurance (obviously) as it's so much more of a big deal without something like the NHS - but very little UK based analysis that I could find so it's useful to hear others' experiences.

The "best" UK ones I found were:
https://www.thisismoney.co.uk/money/pen ... ealed.html
and
http://web.archive.org/web/202009291123 ... -worth-it/

I'm inclined towards the self-insure strategy, and maybe to consider these expenses as part of a bigger notional pot with other items that could be "traded" in the event that significant medical expenses were in one year (I'm thinking of deferring replacing a car or forgoing an extra holiday...)

scrumpyjack
Lemon Quarter
Posts: 4811
Joined: November 4th, 2016, 10:15 am
Has thanked: 605 times
Been thanked: 2675 times

Re: Health insurance or self-insure?

#418878

Postby scrumpyjack » June 11th, 2021, 4:31 pm

The US is a complete different situation and I understand there you can get completely screwed if you don't have insurance because the insurers have deals with hospitals which result in the uninsured being charged at a ludicrously higher tariff. That is not the case in the UK.

But I would just say in the UK it is better to go to a good provincial hospital if you can. I have been treated at the Nuffield Cambridge, Pinehill in Hitchin and the London Clinic (amongst others). The London Clinic was an emergency and I was looked after very very well, but the prices are eye watering - aimed at Arabs and other wealthy foreigners I guess. The Nuffield and Pinehill were also very very good but you had a fixed fee for the whole thing and the tariff was much much lower than the London Clinic.

Snakey
Lemon Pip
Posts: 73
Joined: January 29th, 2017, 1:31 pm
Has thanked: 97 times
Been thanked: 118 times

Re: Health insurance or self-insure?

#419209

Postby Snakey » June 13th, 2021, 11:25 am

With a 62% marginal tax rate I never took up the health insurance, statistically a minor gamble (in my forties and no health issues) which has paid off. I still intend to not bother. I see it in the same category as care home costs and similar - if you need it then you need it and that's the sort of thing your savings are for when all's said and done, to give you options.

Of course I can easily say this, from the position of never having needed the NHS for anything much. I mean I have no frame of reference re what it might feel like to need non-essential surgery (contradiction in terms but you know what I mean) and be told it'll be two years.

I feel like maybe if it did happen, my thought process might not lean towards calculating how much I'd have spent in premiums if I'd always had insurance vs how much I'm paying out now and beating myself up/patting myself on the back accordingly, but more like a comparison of how it would feel not to get the work done for another two years vs how it would feel to pay £x to have it done next week and thanking the gods that I have the choice.

I think we should all take a moment to consider how lucky we are not to live in the US, despite the many things I love about that country. It makes up such a large part of their discussions, and the whole question of who will and won't need it is such a lottery.

airbus330
Lemon Slice
Posts: 558
Joined: December 1st, 2018, 3:55 pm
Has thanked: 364 times
Been thanked: 288 times

Re: Health insurance or self-insure?

#419286

Postby airbus330 » June 13th, 2021, 3:34 pm

If you accept the restriction that they place on whats covered, Beneden might be worth a look as an inexpensive add-on to NHS care. It needs a bit of thought and a close look at the limitations on the policy. Also where you live, as London hospitals appear largely excluded due cost. Otherwise 11.40/month.

gryffron
Lemon Quarter
Posts: 3605
Joined: November 4th, 2016, 10:00 am
Has thanked: 550 times
Been thanked: 1584 times

Re: Health insurance or self-insure?

#419664

Postby gryffron » June 15th, 2021, 12:46 pm

My dad has benenden cover from his civil service pension.

As airbus said, they only cover a restricted number of conditions, but they do seem to be pretty good. He had a cataract operation earlier this year. NHS said 12 months wait, benenden said Friday.

Importantly, the cost is fixed when you join. Unlike most private insurance it doesn’t go up dramatically with age. IMO it’s a pretty good deal. But do beware it is nowhere near comprehensive.

Certainly worth considering as a halfway-house. You can always self insure for the bigger, and much less likely, risks.

Gryff

Dod101
The full Lemon
Posts: 16629
Joined: October 10th, 2017, 11:33 am
Has thanked: 4343 times
Been thanked: 7534 times

Re: Health insurance or self-insure?

#419681

Postby Dod101 » June 15th, 2021, 1:35 pm

Like scrumpyjack I stopped my private health insurance when I retired. You would probably only need it for elective surgery anyway, like a hip replacement or similar. I have had both hips replaced but the NHS did them both (obviously pre Covid) A friend of mine has just paid to have a hip replacement rather than wait a year or longer for the NHS at the moment. He was not insured and paid a tad under £12,500. A lot of money but surely 'doable' by most people on these Boards. LIfe threatening ops will be handled by the NHS almost come what may so I would certainly not pay the premiums for private cover.

Dod

bluedonkey
Lemon Quarter
Posts: 1790
Joined: November 13th, 2016, 3:41 pm
Has thanked: 1393 times
Been thanked: 652 times

Re: Health insurance or self-insure?

#419697

Postby bluedonkey » June 15th, 2021, 2:49 pm

Another vote for self insure.

airbus330
Lemon Slice
Posts: 558
Joined: December 1st, 2018, 3:55 pm
Has thanked: 364 times
Been thanked: 288 times

Re: Health insurance or self-insure?

#419702

Postby airbus330 » June 15th, 2021, 3:05 pm

gryffron wrote:My dad has benenden cover from his civil service pension.

As airbus said, they only cover a restricted number of conditions, but they do seem to be pretty good. He had a cataract operation earlier this year. NHS said 12 months wait, benenden said Friday.

Importantly, the cost is fixed when you join. Unlike most private insurance it doesn’t go up dramatically with age. IMO it’s a pretty good deal. But do beware it is nowhere near comprehensive.

Certainly worth considering as a halfway-house. You can always self insure for the bigger, and much less likely, risks.

Gryff

Just out of interest, have you ever come across any alternatives to Benenden? I cursory trawl of google suggest they are the only one in the market.

gryffron
Lemon Quarter
Posts: 3605
Joined: November 4th, 2016, 10:00 am
Has thanked: 550 times
Been thanked: 1584 times

Re: Health insurance or self-insure?

#419711

Postby gryffron » June 15th, 2021, 3:27 pm

No I haven't. Everything else I've seen tries to be all-consuming, and is thus cripplingly expensive, especially as you get older.

Benenden seem to cover only the common and quick-fix complaints. But do cover them well (IME)

Gryff

bluedonkey
Lemon Quarter
Posts: 1790
Joined: November 13th, 2016, 3:41 pm
Has thanked: 1393 times
Been thanked: 652 times

Re: Health insurance or self-insure?

#419713

Postby bluedonkey » June 15th, 2021, 3:37 pm

I believe Benenden, even after accepting you as a policyholder, have complete discretion whether to actually provide the required operation or not.

Kantwebefriends
Lemon Slice
Posts: 356
Joined: November 5th, 2016, 4:02 pm
Has thanked: 26 times
Been thanked: 102 times

Re: Health insurance or self-insure?

#419819

Postby Kantwebefriends » June 15th, 2021, 10:49 pm

gryffron wrote: You can always self insure for the bigger, and much less likely, risks.
Gryff


But insurance is classically bought to cover precisely such risks i.e. low probability but high costs.

For routine risks self-insurance makes sense, just as you would self-insure for minor treatments for your pets, or for breakdowns of you kitchen appliances.

gryffron
Lemon Quarter
Posts: 3605
Joined: November 4th, 2016, 10:00 am
Has thanked: 550 times
Been thanked: 1584 times

Re: Health insurance or self-insure?

#419828

Postby gryffron » June 15th, 2021, 11:41 pm

Kantwebefriends wrote:
gryffron wrote: You can always self insure for the bigger, and much less likely, risks.

But insurance is classically bought to cover precisely such risks i.e. low probability but high costs.
For routine risks self-insurance makes sense, just as you would self-insure for minor treatments for your pets, or for breakdowns of you kitchen appliances.

Yes, I agree. Although of course health is a difficult one. Some complex conditions have crippling cost that even the best private insurance won’t cover. And for those you’re back to the good ol NHS. Which is always there as “insurer of last resort”.

Benenden is probably best as a low cost cover for lower earners who want access to the cheaper/more common private facilities.

Gryff

Hariseldon58
Lemon Slice
Posts: 834
Joined: November 4th, 2016, 9:42 pm
Has thanked: 124 times
Been thanked: 513 times

Re: Health insurance or self-insure?

#420836

Postby Hariseldon58 » June 20th, 2021, 12:11 am

Hari’s Insurance has no operating admin costs, is totally not for profit and will always act in the interest of Hari and family, accepts all previous conditions and never tries to avoid a claim because of the ‘small print’.

You can’t say the same for other insurers.

Self Insure.

Kantwebefriends
Lemon Slice
Posts: 356
Joined: November 5th, 2016, 4:02 pm
Has thanked: 26 times
Been thanked: 102 times

Re: Health insurance or self-insure?

#420988

Postby Kantwebefriends » June 20th, 2021, 6:11 pm

Hariseldon58 wrote:Hari’s Insurance has no operating admin costs, is totally not for profit and will always act in the interest of Hari and family, accepts all previous conditions and never tries to avoid a claim because of the ‘small print’.

You can’t say the same for other insurers.

Self Insure.


For many people a good place to keep your self-insurance fund would be in the likes of a SIPP. If you need the money for an operation (say), withdraw it. If it's never called upon before your death you can direct it to your widow, your children, grandchildren, ... outside your estate - so no waiting for probate and no Inheritance Tax to pay.

You'd just want to be confident that the withdrawal never shoved you up into a higher tax bracket.

Steveam
Lemon Slice
Posts: 974
Joined: March 18th, 2017, 10:22 pm
Has thanked: 1745 times
Been thanked: 534 times

Re: Health insurance or self-insure?

#421005

Postby Steveam » June 20th, 2021, 8:11 pm

Does Hari’s Insurance also cover the house, the contents, appliance breakdown and travel? If not, why not. Ah! Of course, Hari’s health insurance is “underwritten” by the NHS. If Hari’s decides not to pay the NHS will provide a service albeit at a different level.

Ten years ago I had a serious medical problem overseas - thank heavens I didn’t self insure. The bill came to £50k+ and had things gone badly we’d have been talking a couple of hundred thousand (unless I died) - life changing sums for some. I suspect the bills would be twice that today.

Back to the OP. I do the same as Hari but I’m very aware that if all went to pot the NHS is still there.

Best wishes,

Steve

Hariseldon58
Lemon Slice
Posts: 834
Joined: November 4th, 2016, 9:42 pm
Has thanked: 124 times
Been thanked: 513 times

Re: Health insurance or self-insure?

#421132

Postby Hariseldon58 » June 21st, 2021, 12:05 pm

Steveam wrote:Does Hari’s Insurance also cover the house, the contents, appliance breakdown and travel? If not, why not. Ah! Of course, Hari’s health insurance is “underwritten” by the NHS. If Hari’s decides not to pay the NHS will provide a service albeit at a different level.

Back to the OP. I do the same as Hari but I’m very aware that if all went to pot the NHS is still there.

Best wishes,

Steve


Hari’s insurance stands by for all risks….however some insurance is mandatory, cars, travel ( condition of future booked holiday booked for next year) Other insurance covers low possibility but expensive outcomes, House insurance is cheap for the cover provided , sub £200 for hundreds of thousands of pounds of cover.

Some times we pay ‘insurance’ without identifying it as such, more expensive, more reliable appliances, cars etc.

The very nature of early retirement and living off investments needs to include ‘insurance’ ie I feel comfortable having an investment portfolio that is about now about twice the size required, assuming reasonable expectations. This allows for the potential of the market falling very heavily and any number of other financial calamities.

Back to the OP, we fall back on the NHS as the basis of health planning.


Return to “Retirement Investing (inc FIRE)”

Who is online

Users browsing this forum: No registered users and 11 guests