Is Health Insurance Worth the Cost?

One of the biggest dilemmas for people with a limited budget is whether it is worth taking out health insurance. This group of people includes retirees, young people at the beginning of their career and couples with young families. For retirees the dilemma is magnified, because both claims and premiums escalate very quickly with age. In the event of an accident, emergency, or critical illness, the public health system generally provides an excellent standard of care. However, our aging population is putting severe pressure on health services which is only going to get worse. A shortage of resources can only mean longer waiting lists for non-critical treatment. The question of whether to take out health insurance is best answered by a thorough analysis of risks, probabilities, consequences and costs. Ask yourself these questions:

What are my risks? Your future health risks will be influenced by your previous health history and genetics.

What are the probabilities? Consider how likely it is that your risks will become realities.

What are the consequences? If you do become ill, are you happy to rely on the public health system? Delays may cause loss of income through not being able to work, further deterioration in health, and loss of enjoyment of life

What financial resources do I have?  By not paying for health insurance or having limited cover you are ‘self-insuring’ and will need funds on hand if you are not prepared to rely on the public health system.

The costs of health insurance can be kept down by buying it when you are young, before any health issues emerge which may lead to higher premiums or exclusions. You can restrict the cover to the more expensive and less frequent costs such as hospital and specialist treatment, and a high excess will lower premiums.


Liz Koh is an Authorised Financial Adviser. The advice given here is general and does not constitute specific advice to any person. A disclosure statement can be obtained free of charge by calling 0800 273 847.  For free eBooks, go to and