What is private medical insurance (PMI)?

Why buy private medical insurance?

How does private medical insurance work?

What information am I likely to have to provide?

How do I select the right cover for me?

Are my premiums likely to increase over time?

Can I reduce my premiums?

Can I move insurers?

Is the private medical insurance market regulated?

Q. What is private medical insurance (PMI)?

A. Private medical insurance (also known as health insurance) is intended to cover you for the costs of having private medical care, most commonly for acute conditions occurring after the start of your policy

Acute conditions, as opposed to chronic conditions, are those that return you to a state of health experienced before you were ill or injured. Cover may be available for chronic conditions, cancer or other conditions, by speaking to your insurer.

Q. Why buy private medical insurance?

A. Whilst UK residents receive cover via the NHS, having the opportunity for quick consultation and treatment is often very reassuring. Private medical insurance also offers a choice of how and when you have treatment, which specialist you see and the hospital you visit. The facilities available in a private hospital will often be an improvement on those found in an NHS hospital. Some policies will also cover you for treatment in NHS hospitals as well as private.

Q. How does private medical insurance work?

A. Usually you will need to be referred to a specialist by your GP to commence any treatment. However it is important that you contact your insurer before you commence any treatment to make sure you are covered. Some illnesses may not be covered, for instance, pre-existing medical conditions. Also it is worth noting that Private Medical Insurance is designed to work in tandem with other services provided by the NHS such as accident & emergency.

Q. What information am I likely to have to provide?

A. Normally you wouldn’t be covered for any current or previous illnesses. These are referred to as "pre-existing conditions". You must ensure you provide full and accurate information to the best of your knowledge. There are two main ways in which health insurance companies handle your application. These are:

Full medical underwriting

You will be required to provide details of your medical history. This may include the insurer writing to your GP for further information. It is important you provide all the information they request. If you don’t, you may not be able to make a claim or may have your policy cancelled. If you are not clear whether to mention something, it is always best that you do.

Moratorium underwriting

You should not have to give details of your medical history. Rather the insurer will not cover treatment for any medical or related condition that you have already received treatment for, taken medication for, asked advice on or had symptoms of.

Basically you will not be covered for any condition that existed in the past number of years. This period is commonly the last 5 years.

You may be able to cover these conditions in future; however you will need to have not had any symptoms, received treatment, medication or tests for a period of time, likely to be at least two years after the policy start date.

Once you have been provided with information by the insurer on how the moratorium will work it may be worth contacting the insurer to discuss in detail how it works

Q. How do I select the right cover for me?

A. Some employers provide Private medical insurance (PMI) cover to staff as part of their benefits package, so it is worth checking whether you already have this cover. Some clubs of professional associations might also be able to secure you preferential rates for your cover.

If you are not able to take PMI cover elsewhere you will need to consider what you would like your insurance policy to cover you for. There are very many different policies available from low cost, with limited cover, through to high end all-encompassing policies with a wide range of benefits. Some policies won’t cover you for outpatient treatment of diagnostic tests, but all should provide a level of cover for inpatient and day-patient care.

To decide what policy is right for you, consider the following:

• What you will not be covered for? Often the more you are prepared to pay the more you will be covered for.
• How much are you prepared to spend on your policy?
• Do you want to use a specific hospital or group of hospitals?
• Would you like to include diagnostic tests as part of out-patient treatment?
• Do you want to be fully or part covered for any treatment?

Q. Are my premiums likely to increase over time?

A. It is normal for premiums to rise each year in line with inflation. The cost of healthcare and therefore insurance also increases as new technologies and treatments become available. Private medical insurance looks to stay apace with medical developments therefore the cost may rise.

Also as you become older the likelihood of you needing treatment increases, often meaning your premiums will go up.

Q. Can I reduce my premiums?

A. In order to reduce your premiums you may wish to consider the following:

• The level of excess on the policy, where you pay the first amount on any claim or per year, i.e. £100 or £200
• Certain payment methods, especially automatic or lump-sums, may attract further discounts
• Reduce the level of benefits or a specific range of hospitals

Q. Can I move insurers?

A. You can change your health insurer. If you would like to change, then it is worth considering the following:

When to switch?

Most insurers offer annual policies, therefore you may be best to consider switching at the annual anniversary of the policy. At other times you may incur a charge to move to another insurer.

Is the cover the same?

It’s likely that the policy with a new insurer will be different. You should check the benefits, the monetary and cover limits and enquire as to how the policy works.

Policy Documents

You may need to provide a copy of your existing policy as evidence of your current cover.

Existing conditions

Your current policy exclusions may be matched by your new insurer. Also they may not cover any conditions you have had in the past, even if this is covered currently. It is important to check this with any prospective new insurer.

Q. Is the private medical insurance market regulated?

A. Yes, the FSA regulates all insurers, brokers & intermediaries. The Government set up the Financial Services Authority (FSA) to regulate financial services. The FSA maintains a list of all authorised companies.