Jasmine Birtles
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Private medical insurance: how to choose PMI
Reading Time: 6 minutesPrivate medical insurance (PMI) is becoming increasingly popular in the UK.
With all the controversy about funding and long waiting lists in NHS hospitals, it’s not surprising that people are turning to private medical insurance to cover themselves.
Here’s a guide to the different types of medical insurance, what they cost and what you can expect.
- What is private medical insurance (PMI)?
- What you need to know about private medical insurance
- What does PMI cover?
- What doesn’t PMI cover?
- How much will PMI cost?
- How to cut the cost of PMI
- Alternatives to PMI
What is private medical insurance?
PMI helps to cover the costs for private medical care if you’d rather not wait for treatment on the NHS. The basic facts are:
- If and when you need treatment, the policy pays out (provided the problem is one that’s covered by the policy – not all of them are) which can give you peace of mind.
- PMI allows you to avoid the waiting lists and get treatment fast.
- You can often choose when and where you’re treated and you’ll have the comfort and privacy of your own furnished room (and probably much tastier food!).
- We’ve all read about people having to wait months for referral to a specialist or surgery, and for some people the thought of having to wait so long for treatment is enough to convince them to go private.
- Remember that PMI is not a replacement for the NHS. Accident and emergency services, for example, are still dealt with by the NHS alone.
What you need to know about private medical insurance
You can buy insurance from an insurance company, independent adviser or an insurance agent.
You’ll usually need to fill out a medical history declaration and provide the insurers with your full medical history. They may contact your GP for further information.
Make sure you give all the information you’re asked for because an insurer could refuse to pay out for a claim in the future if you don’t. Any pre-existing conditions will not be covered by the policy should they arise again, no matter how long ago you set up the policy. You’ll also have to pay the costs yourself.
Some insurers offer a moratorium policy, which sounds a bit complicated but all it means is that you don’t have to provide a full medical history, just some basic information about you and any members of your family you wish to insure.
Here are some things to know about moratorium policies:
- If you’re generally fit and well and any pre-existing conditions were a long time ago, then this could be a good option.
- Make sure you’re absolutely clear about the moratorium conditions and DON’T think that you can just avoid getting medical help for the first two years of your policy for a recurring illness because this is not only very dangerous but also pointless because these policies would not pay if you ‘ought reasonably’ to have sought treatment or advice.
- Pre-existing medical conditions and conditions related to them will become eligible for cover after a particular period of time (usually five years) during which you must not have had treatment, symptoms, medication, tests or advice for that condition (or a related one).
What does PMI cover?
PMI is designed to cover the costs of private medical treatment for what are called ‘acute’ conditions. Insurers define these as illnesses, diseases or injuries that can respond to treatment quickly. With Bupa, like many other health insurers, customers can reduce the cost of their policy by choosing from different levels of cover. Although there may be a cap on the amount you can claim in each category, it will usually cover the cost of:
- Inpatient treatment
- The fees of private medical staff for both diagnosis and treatment
- Operating expenses, including surgeons’, anaesthetists’ and operating theatre fees
- Accommodation and nursing charges
- X-rays, dressings and medication while an inpatient
- Outpatient treatment that’s linked to your inpatient treatment.
What doesn’t PMI cover?
Don’t forget PMI is like any other insurance – you find out what you’re not covered for when you claim. ALWAYS read the small print!
Most policies exclude all past medical problems, known as ‘pre-existing conditions’ and no policy will cover all your medical needs. The following are almost certain to be excluded:
- Routine check-ups from a GP, dentist or optician
- A&E treatment
- An illness you developed shortly before taking out the policy
- Incurable or chronic conditions, including the terminal stages of cancer
- Long-term illnesses such as asthma, diabetes and multiple sclerosis
- Normal pregnancy and childbirth
- Cosmetic surgery
How much will PMI cost?
What you pay for depends on:
- your age, sex, health, and where you live
- The more comprehensive the cover offered by a policy, the higher the premiums so you’ll need to shop around to find the best cover for you
- Policies have different charging levels and different breadths of cover.
Your PMI premiums will also rise over time. This is because as your age increases so does the likeliness that you will need to claim and also the fact that new treatments, drugs, technology may become available and will add to costs.
You’ll also be thrilled to know that medical inflation (the cost of buying treatment in the private market) also runs above the rate of normal inflation. Great.
One of the biggest costs if you need treatment can be hospital accommodation. Most insurance providers offer different options that put hospitals into grades A-C with the higher grade costing more. So a band A premium will pay for the most expensive private hospitals and a band C premium will pay for medium-priced private hospitals. Make sure you consider the distance and reputation of hospitals offered by the insurance company before you make a decision.
If you’re prepared to pay a higher premium, you can get a policy that also provides cover for:
- Cash payments if you stay in hospital as an NHS patient
- Outpatient tests and treatment not linked to an inpatient stay
- Emergency medical treatment when travelling abroad.
Most insurance companies say you can choose where you want to be treated – with travel costs included – at a price. Surprise, surprise, though, with PMI you get the cover you pay for, so those kinds of extras will add handsomely to your premiums.
It may be worthwhile going through a registered PMI broker who should be familiar with a wide range of policies and can recommend one to meet your needs. A broker earns money through commission from insurers so if you do use one ask for several policies so that you can compare costs, benefits and how much commission the broker gets from it!
How to cut the cost of PMI
Try to get a rough idea of what you can afford each month and seek to tailor the choice to your budget:
- There may be a discount if you can pay the whole annual premium in one go.
- Choose a policy with a no-claims discount, but be warned; lower premiums for no claims may rise sharply if you do claim!
- If you agree to pay an excess on an insurance policy you’ll be offered lower premiums. An excess is an amount the subscriber pays themselves towards any claim – for example, you could agree to pay the first £500, which may work out cheaper in the long run.
- Check to see if your employer offers PMI for you or your family as a perk – it’s still taxable but it’s a lot cheaper than buying a policy yourself.
Alternatives to PMI
PMI isn’t right for everyone, particularly if you’re on a very tight budget. Luckily there are alternatives you can consider:
- Stick with the NHS. You’re paying for it anyway through national insurance and private hospitals may not be able to provide you with the range of expertise that you can get with NHS.
- Take out critical illness insurance only. This will pay out a lump sum if you’re diagnosed with a serious illness.
- Insure yourself. Put money into a special savings account each month to help pay for private treatment. These one-off costs will be expensive but you could consider putting a large amount of cash into a high-interest savings account or a cash ISA each month so that if you don’t use it for a few years you can either spend it on something nice later on or have enough saved up to pay for an expensive medical bill. It’s worth a go!
Hi Jasmine! I’m a French expat and have been working in the UK for nearly 3 years. I tried the NHS but my existing conditions are not on their ‘list’: they only do diabetes, obesity, and they tried to get me to do tests for venereal diseases! I met a German pharmacist who has been working for the NHS for nearly 5 years, and she still travels back to Germany for medical treatment. I’ve also met a couple of Polish people who travelled back to Poland, including for operations. So I also travel back to France every couple of months:… Read more »
Hello Helene, thanks for your detailed question. It’s a good one! I also know expats here who go home for medical and dental treatment – mainly because it’s better. However, we will go ahead and research this for you and let you know. Keep checking back here for the answers! Jasmine
Hi Helene, We’ll look into your PMI query. In the meantime, you should be aware that if you are a French national, you should have access to free NHS hospital care (as France is in the EEA / European Economic Area). As you’re employed/self-employed with your principal place of business in the UK, you should be fully exempt from NHS hospital charges in England. This exemption also applies to your spouse, civil partner or children (under the age of 16 or 19 if in further education) if they are living with you in the UK on a permanent basis. You… Read more »