The length of NHS waiting lists and the standard of care are constant sources of often troubling news. That’s why many people opt for private medical insurance (PMI), to assure themselves that they will receive prompt and efficient treatment should they fall ill. About 11% of the UK’s population (around 6.5m people) are covered by PMI.

What’s covered?

The sorts of illnesses covered by PMI are curable, short-term medical conditions (often known as acute conditions). Specialist care, surgery, x-rays, hospital accommodation, drugs and nursing can all usually be paid for through an insurance claim. Incurable, long-term complaints (or chronic conditions), such as diabetes and multiple sclerosis, tend not to be covered by PMI.

Nor will policies pay out for GP services, cosmetic surgery, or treatment for drug and alcohol addiction, normal pregnancy, infertility, HIV/Aids, degenerative illnesses brought on by old age and or dental problems.

The cost

Your premiums will be determined by your age, where you live, your health and your past history of claims. There is also, broadly speaking, a choice of three policy levels: comprehensive, standard and budget.

• A comprehensive plan will be the most expensive;, usually covering the full cost of basic medical services like surgical fees, accommodation, out-patient care, osteopathy, drugs and dressings.
• A standard policy is cheaper and tends to offer fewer frills, including restricted outpatient services.
• The most basic, low-priced plan generally provides full refunds for elementary services, but limited outpatient services and few extras.

Adding your partner and family to the insurance scheme obviously means higher premiums, although these bulk policies can actually work out cheaper per person and some insurance companies offer free cover for children.

You may be able to reduce your premiums by making use of an option to increase your excess, whereby you meet the first £50, £100 or few hundred pounds of your claim.

Underwriting

When signing up for PMI, you will be offered two styles of underwriting (the assumption of financial responsibility by the insurance company): full and moratorium. Some insurers only offer the former, which requires full details of your medical history (and possibly a medical examination).

An underwriter will then assess the risks you pose, if any. Previous serious medical conditions will usually be excluded from cover, or incur an extra premium.

Moratorium underwriting excludes you for all subsequent treatment for illness you have suffered during the past five years. But once you have been free of all medication, treatment consultations and symptoms for a given period after signing up to the plan (usually two years), you will automatically be covered for the condition. Such policies are quicker and easier to get, but can cause anguish when claims aren’t met.

Buying PMI

As with all personal finance packages, it pays to look around for the most suitable for your needs. An independent financial advisor will be able to tell you about available PMI schemes and explain the, often baffling, jargon used by private medical insurers.

The Association of British Insurers (www.abi.org.uk) can provide a list of private medical insurers. We also have a list of links to a wide choice of private health and medical insurance companies and brokers (www.uknetguide.co.uk/Finance/Insurance/Health_Insurance.html).

Most PMI schemes include a cooling-off period in case you buy a policy that you later decide you don’t want and wish cancel. This is usually two weeks after receiving the relevant documents. Any premiums paid will be returned. After the stated length of time, your insurance company will not be obliged to offer a refund.

Take care when switching from one insurance provider to another, because you may lose cover for existing medical conditions that your previous insurer provided.

Making a claim

Before receiving any private medical treatment, always consult your insurance company, which will provide the details of making a claim. Your PMI provider will confirm cover of your treatment, advise you on any limits on specialists and hospitals you may use, and how the medical bills will be paid.

Be aware that some policies restrict the type of hospital accommodation you may use and there may be a cap on the maximum benefit payable in any one year.