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Planning Retirement Online

Top tips for buying Private Medical Insurance


Did you know, the NHS target for treating a non-emergency procedure such as a knee or hip operation is 18 weeks?* The UK's healthcare system is one of the best in the world, but it's worth asking whether you can rely on this alone.

Private Medical Insurance can provide you and your loved ones rapid access to consultants, diagnosis and treatment - getting you back on your feet much sooner.

(* correct as at October 2015)


Top Tips for buying PMI links

This short Guide aims to provide you with some things to think about to help you decide what you need cover for and how to go about buying Private Medical Insurance.

Have a look at the sections of the Guide by clicking on the links in the box.

You can also have a look at our Health section with monthly articles on all sorts of topical issues and you can click on the Index to see what's available. There may be something that is of special relevance to you or you might just like to browse through some of the articles to get a feel for the kind of information that we provide.


Benefits of Private Medical Insurance

  • Easy access to a consultant for diagnosis
  • Fast inpatient, day patient and outpatient treatment
  • Treatment in clean, modern facilities, with advanced technology
  • Cover for serious illnesses, like cancer
  • Physiotherapy and complementary practitioner treatment
  • Access to new surgical procedures and treatments
  • Choice over who will supervise your treatment and which hospital you visit

What is important to you?

The first question when buying Private Medical Insurance (PMI) should be “what is important to you?” Are you looking for the reassurance that you are covered in full or are you looking for ‘disaster’ type cover for major hospital bills.

The majority of PMI policies will provide you with full cover for In-Patient and Day-Patient treatment, e.g. where you have to stay in hospital for the day or overnight. One of the main differences between policies is usually the amount of out-patient cover they provide for things like specialist consultations and diagnostic tests (blood tests and x-rays). You can usually choose to have this covered in full, a specific annual limit or remove the benefit all together.

You may also have the option of including an excess on the policy. Although a higher excess will reduce the premium, when it comes to claiming, would a higher excess mean that you are unable claim?  Some providers' excesses are per claim, others are per policy year.  Make sure you are comparing like for like when looking at insurers’ policies.

Seek advice

Buying PMI, be it for the first time, or if you are looking to switch to a new provider, can be a bit of a minefield. It’s worth seeking expert advice, be careful with companies who only offer a non-advised service as they can’t give you advice, they can only give you the facts and let you pick for yourself.


Check the underwriting

PMI quotations can vary in price, some seeming to be a lot lower than others, for what appears to be the same level of cover. Generally, quotations you obtain online either direct from the provider or from comparison sites will be on a newly underwritten basis, meaning they may not cover you for pre-existing conditions. This makes you much less of a risk to a provider as you can only claim for new conditions, making the premium cheaper.

It is very important to take this into consideration if you have an existing policy in place or you are leaving your employer's scheme as it may be more appropriate for you to look at a "continuation of underwriting" option. A continuation option can be more expensive but could protect cover for
pre-existing conditions.


High No Claims Discount

Most individual policies include a mandatory No Claims Discount (NCD). This can make the initial premium seem quite appealing but it is important to look at the starting levels offered by companies, how big the NCD scale is and how many levels you are likely to drop if claims are made. 

For example if an insurer is offering you a No Claims Discount of 50% you need to be aware that if you start claiming on the policy then the premium can double. This is even before any increase to the premium due to medical inflation (which in our experience, runs at a much higher level than normal inflation). Large savings in the beginning can often result in larger premiums in the long run.

Some insurers have a ‘per person’ No Claims Discount, others are ‘per policy’ so you might have four people insured on the policy, and claims from just one person could cause you all to drop down on the scale.

Try to calculate what the base premium would be and take this into consideration when making your decision.

For example:

A monthly premium of £150 with a 35% No Claims Discount means you are only paying 65% of the true cost of the policy. The true cost can be worked out with the following calculation:

100 – The NCD percentage  
100 - 35 = 65

Divide the premium by the above answer and multiply by 100
£150 ÷ 65 × 100 = £230.76 per month

Think long term

When taking out a policy you will need to bear in mind what cover you may need in the future. It may be tempting to opt for a lower level of cover now to keep the cost as low as possible. However, in the future your needs may differ and it can be hard to upgrade without being re-underwritten.

Once you have had treatment or seen a specialist it may be difficult to switch provider without exclusions being applied. Make sure you are happy with the policy before you sign on the dotted line.


Read about other options for your wellbeing in retirement.



This Guide is provided by Healthcare Insurance Specialists Jelf Employee Benefits supported by members of the LaterLife team.
back to LaterLife Guides



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