Coronavirus Travel Rights
23 April 2021
Private Health Insurance
The NHS provides comprehensive treatment to anyone, regardless of their ability to pay. Yet if you want to opt for private care, it can be costly, so private health insurance could help. This guide explains how it works, what to watch out for and how to buy a policy.
Put simply, private health insurance – or private medical insurance (PMI) – is a policy that covers the cost of private medical care should you become unwell. It works alongside the NHS, and often gives you access to shorter wait times, a choice of location or treatments only offered privately.
You pay a monthly sum to the insurer, then it pays for certain private treatment you may need during the policy, such as consultations or surgery.
Health insurance is designed to cover you for non-routine tests and treatment for acute conditions (serious but curable and usually short-lived) that start after your policy begins. Therefore many chronic (often incurable, long-term issues such as arthritis or asthma) and pre-existing conditions are excluded as standard.
The exact range of medical treatments covered will vary based on the policy and the price you pay, though here are some examples:
Basic plans usually cover essential treatments, whereas comprehensive cover can also include specialist therapies or medicines.
Typical conditions that are covered include musculoskeletal problems (eg, short-term back pain), digestive system conditions (eg, gastroenteritis), cancer, heart and circulatory diseases (eg, coronary heart disease) and eye and ear conditions (eg, an inner ear infection).
If your tests lead to a diagnosis of a chronic condition, the initial tests are usually covered, but the long term treatment isn’t. For example, if you developed symptoms of diabetes and your GP referred you to a specialist to diagnose the issue, your policy should cover this. However if you are then diagnosed with diabetes, any treatment, mediation or check-ups would no longer be covered, and would instead pass to the NHS.
It's different from a critical illness insurance policy. Private health insurance pays for medical treatment to get you better, whereas critical illness pays out a lump sum to help offset any loss in income. A critical illness could be defined differently by each policy, but could include Alzheimer's or presenile dementia, cardiac arrest, deafness, loss of speech, paralysis of a limb, stroke or brain injury.
Any policy is optional, so you'll need to weigh up whether the monthly cost is worth it for you. But here are some key points to consider:
If you think private health insurance is right for you, here are six key need-to-knows to understand before opting for a new policy.
Many providers sell cheap, basic plans to which you can add extras such as extra cancer care or outpatient treatment to suit your needs and budget. Decide why you need private medical insurance – to cover every eventuality or more specific medical conditions.
You can also cut the cost by restricting when you use the policy. Several insurers will lower your premium if you choose what's called a 'six-week option'. This means if the waiting time with the NHS is six weeks or under, you'll be treated with the NHS. If it's more you'll be eligible for private healthcare.
Policies for children are designed to cover short-term conditions, in the same way that adult plans are, although some policies won't protect children for certain conditions or will only cover them for inpatient and outpatient hospital treatment – so always check the policy before you buy.
Make sure you know what your family's needs are, then make sure the policy matches up. And remember – as most children's treatments are free on the NHS, the amount you can claim for is limited.
Also be aware that some private hospitals may not be set up to accommodate children, so before you buy, check the insurer's list of hospitals to see if children are allowed, and that they're local.
As with most insurances, you usually have to pay an excess, ie, an amount towards the claim. The larger the excess, the cheaper the premium. So consider what you'd be claiming for. Are you getting insurance to cover everything OR are you getting this only in case of a big medical issue such as a hip replacement? If the latter, look at pushing the excess up high to reduce your premium. For example, a 50-year-old's policy that's £858/year with no excess dropped to £619 with a £500/year excess.
Once you've selected the excess, you'll then usually need to select the frequency of paying the excess – which differs from many other forms of insurance. The options are:
In addition to excluding pre-existing or chronic conditions (eg, arthritis or asthma), there will usually be other exclusions or situations where you'll be unable to claim, such as cosmetic treatment, pregnancy, dental, self-inflicted injuries or those suffered doing dangerous pastimes (eg, skydiving).
Always check your policy carefully to avoid any nasty surprises if you were to make a claim.
Your choice of location and practitioner could still be restricted
Always check with your insurer, but here's a typical claims process as a rough guide:
The claims timeframe will likely vary based on the information you provided when you signed up. Here are the two different types explained:
Some insurers will charge you less if you can prove you can stay in good health with regular exercise and healthy eating. Non-smokers will also benefit from preferential prices.
With Aviva's My Health Counts, for example, you can save up to 15% on your renewal if you sign up, complete a health questionnaire and then log back in to update your score between 6 and 9 months into your policy.
While VitalityHealth offers rewards for completing activities each week, which is tracked via a phone or activity tracker. However, always be aware that you might save more by switching provider.
Check perks on offer
There are often perks such as discounted gym membership. We've listed some examples below, but never choose a product based on freebies and sweeteners – make sure you get the coverage you need for a price you can afford.
Health insurance premiums aren't fixed and the price will normally rise over time, usually annually. In addition, as you get older, you're more likely to need treatment and premiums increase to reflect this. So do a comparison each year to check if you can beat your renewal price.
But be careful as most providers won't accept you if you have pre-existing conditions, so to remain covered for a condition you have, it may be better to stick with your current insurer. If you've had treatment via your policy in the last five to seven years, while your existing insurer will usually cover reoccurrences, a new one may exclude it as a pre-existing condition if it recurs within two to seven years.
Haggle with your provider
If the comparison sites (see how to cut costs below) show you're paying over the odds, take that price to your existing provider and see if it'll match it. If not, consider leaving (and politely tell it so, it may help). This MoneySaver told us:
I'm paying £238/month for couple's private medical insurance with Bupa, but I got a quote from Axa for £146/month for better cover. I'm two months away from renewal with Bupa, and after telling them they're giving me one of those months for free.
We've heard providers may even switch you to another of their own brands at a much lower cost (do let us know if that happens).
Switch policy to cut the price
If you already have a health insurance policy, and you find a cheaper quote elsewhere (make sure the cover is at the same level), all you need to do is set up the new cover to cut your costs. The savings can be huge...
Was paying £175/mth – got it down to £96/mth by shopping around for the same level of cover.
With any insurance, the most important factor is ensuring it is fit for purpose and meets your needs. Any like-for-like comparison is tricky for health insurance policies, as there are so many variables. Some policies may include cover as standard, whereas on others it's an optional extra.
You should always get quotes from various providers as prices can vary. We ran quotes from the biggest players in the market, based on a zero excess (so you'd pay nothing towards a claim), unlimited outpatient care and full cancer treatment coverage to show how much costs can differ:
A healthy, non-smoking 70-year-old. Prices ranged from £2,238/yr to £2,834/yr
If you can afford to, it's usually cheapest to pay upfront for your annual policy as insurers often provide discounts. Though always remember to go for a policy that works for you, no matter how good the discount is.
Here are two steps to help you find the best policy for you, and at the cheapest price.
If you're not sure which policy to get, or have conditions making it difficult to find the right one, contact a broker for a more thorough search. It usually takes a bit longer but you should receive a much more bespoke quotation, with any exclusions clearly explained. Brokers often have connections with various insurers so may also be able to offer you a special deal.
Is there a fee?
Brokers get paid commission by the insurer, so if you are charged a fee (which must be disclosed upfront), do weigh up if that is the best or your only option.
How to find a broker
The insurance industry doesn't always have the best reputation for customer service. Plus, while a provider may be good for some, it can be hell for others.
Common problems include claims either not being paid out on time or at all, unfair charges, or exclusions being hidden in small print. It's always worth trying to call your provider first, but, if not, then…
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