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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.
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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.
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.
This gets you multiple quotes from one form. You can then compare the cover and costs from various providers to find the best fit for you. We'd suggest checking both sites if you've time, though if you're not sure what you're doing, consider getting advice.
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
To find a broker, use the Association of Medical Insurers and Intermediaries, a trade association for independent medical insurance advisers. It has a list of members to choose from.
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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…
This tool helps you draft and manage your complaint. It's totally free to use, and it's offered by Resolver, a firm we work with to help people get complaints justice.
RESOLVER – FREE COMPLAINTS TOOL*
If the company won't help, Resolver also helps you escalate your complaint to the free Financial Ombudsman Service.
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