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Cheap Health Insurance

Full cost-cutting plan

Health insurance ain't cheap. It should be viewed as a luxury, not a necessity, as the NHS provides comprehensive medical treatment to anyone who needs it, regardless of their ability to pay.

If you decide to get cover, you need to know exactly what you've bought. This guide explains what health insurance covers how to buy and where you can get the best deals.

What is health insurance?

Health insurance, also known as private medical insurance, covers the cost of private medical treatment for ‘acute’ medical conditions - diseases, illnesses or injuries likely to respond quickly to treatment.

People typically buy health insurance for three reasons; choice, speed and quality of facilities. Policyholders avoid NHS waiting lists. They receive faster consultations and private, usually more comfortable treatment but before you decide whether or not to buy it, ask yourself, do you need it?

Health insurance can cover the cost of private day patient surgery, tests and hospital accommodation but it may excludes trips to a GP, accident & emergency or an organ transplant. See inclusions and exclusions for more.

Health insurance: Need-to-knows

You may not need health insurance

There are a number of alternatives to health insurance. They include self-insurance, cash plans, workplace schemes and the NHS.

There are also a number of policy restrictions, such as cosmetic treatment or injury related to dangerous hobbies, so make sure you NEED it before you buy.

Quick questions:

Can I self insure instead?

Can I use a healthcare cash plan rather than buying health insurance?

I'm already covered under a workplace scheme. Do I need to buy cover?

Can I just use the NHS?

What restrictions will I face if I buy health insurance?

It may not cover pre-existing conditions

Health insurance isn’t designed to cover you for every health issue that might occur. It covers treatment for acute conditions that start after your policy begins - so you may still need treatment via the NHS in some cases.

Some insurers may provide cover for longer-term (chronic) conditions, but you’ll need to check the policy to see what you’re covered for.

Your premiums will increase over time

Even though there's competition in the health insurance market, whatever policy you choose, your premiums are likely to rise each year above the rate of general inflation. As methods for diagnosing conditions become more advanced, the costs of these developments are often passed on to policyholders.

In addition, as you get older, you're more likely to need treatment and premiums increase to reflect this. For example, a 70-year-old's is likely to pay three times more for cover than one for a 35-year-old.

Lots of treatments are NOT covered

Your individual policy will outline exactly what you are and what you aren't covered for. There are some pretty standard exclusions, such as a trip to A&E, normal pregnancy and cosmetic surgery.

Quick questions:

What is usually covered?

What is usually excluded?

How do I apply for cover?

If you've read the above and health insurance is for you, make sure you get the right cover at the right price.

There are two ways applying for cover; either fill out a full questionnaire or automatically exclude conditions you have been recently treated for.

No conditions? Take the questionnaire route

If you don't have a pre-existing medical condition, the best option is to fill out a detailed medical questionnaire. This is known as full medical underwriting.

The insurer will ask you for full details of your medical past and may write to your GP for extra info. Give as much detail as possible - if you don’t, there may be gaps in your coverage or, in extreme cases, your insurer will cancel your policy. If you’re not sure whether to mention something, live by the rule that it’s best to be completely open and honest.

This can be more time-consuming but its worth it as with a clean health record you can gain wider coverage.

Pre-existing conditions? Take the auto-exclusion route

if you have pre-existing medical conditions the best option is the auto-exclusion route, also known as moratorium underwriting.

Moratorium underwriting automatically excludes any conditions you’ve sought advice for, received treatment for, taken medication for or had symptoms of in the past few years. For most insurers, this is five years, but it can differ.

These conditions may later become eligible for cover, but only if you haven’t had any symptoms or received treatment for about two years. If you claim, your insurer may ask for medical notes to decide if your claim can be accepted.

This cover's quicker to apply for and suits people who have pre-existing medical conditions as they may be able to get wider coverage further down the line.

Cutting the cost of cover

The price of cover depends on a number of factors. Obviously if you want all the bells and whistles, you’re going to pay more. If you want a more standard policy, which is likely to have many exclusions, then it’s going to cost you less.

As with any other type of insurance your premium will go up if, and when, you claim. However, there are still ways to cut down your costs.

  • You can pay an excess

  • You can lower monthly payments by agreeing to pay an excess on each claim. Most of the providers offer this as an option. A similar idea is a ‘shared responsibility’ policy, offered by WPA and others, where you agree to pay a percentage of each claim up to an agreed amount.

  • You can limit your hospitals

  • Other than Axa and Exeter Family Friendly, the insurers all give you a choice of hospital. If you're outside London, you can reduce your payments if you're willing to have a more limited choice of hospitals. But Londoners lose out, as you normally have to upgrade to get care in the capital, as many of the biggest private hospitals are based there.

  • You can make fewer or no claims

  • The point of buying health insurance is to make a claim when you need it. But you can keep future premiums down with some providers if you don’t make a claim.

  • You can self-insure

Self-insurance is an option. If you're young, fit and don't smoke, but want the peace of mind of health insurance, instead of whittling away your hard-earned cash on a pricey policy, you can become your own insurer.

Instead of paying hundreds of pounds every year, you could put for example, £30 a month into a high interest savings account (see Top Savings Accounts). Then, if and when you need any minor treatment or consultations, you can dip into your own insurance fund. If you remain fit and healthy, then the added bonus is you’ll keep the money, plus the interest it’s earned on top.

Health insurance: Best buys

Now you know how health insurance works and what to watch out for, it's all about finding the best deal for you. Before you start you need to decide whether you need advice or not.

Check out price comparison sites for the best deals

Health insurance can be difficult to understand, so buying via comparison sites won't suit everyone. Using a comparison site may be a good place to start your research - but if you're not sure what you're, buying contact the insurer directly or use a broker.

Confused.com*, Compare The Market and Gocompare all host a number of health insurers on their sites, as does specialist provider PMI Partners*.

Contact a broker if you need advice

If you’re not confident making the decision, you might want to enlist the services of an independent financial adviser.

Your best option will be to find a member of the Association of Medical Insurance Intermediaries (AMII). They provide independent, specialist advice on individual and group private medical insurance policies.

Some insurers, such as The Permanent Health Company, only offer quotes through financial advisers and not online, which is something to take into consideration.

How do they stack up?

We got quotes from the big players in the market to see who comes out on top. To make it fair, all quotes have a zero excess (so you pay nothing towards a claim), unlimited outpatient care (these depend on what the doctor charges) and full cancer treatment coverage.

Health insurance policies aren't easy to compare, so we're never going to be able to provide a like-for-like comparison. Some areas of coverage are standard with some providers, optional with others; while some have discount offers for the first year or rewards programmes.

For a healthy, non-smoking 35-year-old man (correct as of December 2014):
Provider £ per year

Aviva

£643

PruHealth

£728

Axa PPP

£747

Bupa

£855

Exeter Family Friendly

£1141

For a healthy, non-smoking 70-year-old man (correct as of December 2014):
Provider £ per year

Saga

£1,527

Aviva

£1,902

Axa PPP

£2,220

Bupa

£2,410

PruHealth

£2,437

Exeter Family Friendly

£3,486

Best for discounts. You'll get a discount with Axa if you pay for the whole year upfront. And if you pay by direct debit, you get three months free for the first year with Saga. Another provider to give a discount is WPA giving 25% off your premium in the first year and 10% off in the second.

Best for joint policies. On the whole, it costs little more to get your partner on the same policy but PruHealth actually lowers premium with an additional person.

Best for extra perks. The PruHealth Vitality Plus scheme offers free cinema tickets and gym membership discounts but don’t chose a product based on the freebies - get the coverage you need for the price you can afford.

Claiming on your health insurance

As with everything, this will depend on your insurer. But they all have similar processes which you'll need to follow:

  • Get a referral from your GP, contact your insurer to register the claim and make sure you’re covered for it. Some insurers prefer you to make the claim over the phone or by post, and others via email, which is considered to be quicker and more secure.
  • You’ll usually be asked for a membership number (make sure you have this to hand), the date of the treatment you’re having, details of the procedure, the charge for each service such as the consultation, and the total of all the charges.
  • Ensure your GP refers you to a hospital from your chosen list, so you’re covered.
  • Make sure you keep your insurer up to date throughout the process, for example, after you’ve seen the specialist.
  • You shouldn’t be sent an invoice for the treatment if you’ve followed the correct procedure, your insurer should sort this out for you. If for some reason you do, you’ll need to get in touch with the insurer.

Health insurance: Quick questions

I've heard of private medical insurance, is it the same thing?

What's a healthcare cash plan?

I think I might have health insurance through my employer, do I need cover separately?

What happens if I decide against the policy?

How easy is it to switch insurers?