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Private Medical Insurance Explained

By: Kevin Dowling BA (IMC) - Updated: 15 Oct 2012 | comments*Discuss
Private Medical Insurance Policy Health

Nothing is more important in life than good health. However, for many people the NHS does not meet their expectations for healthcare. Lengthy waiting lists, the threat of MRSA and unaffordable and unavailable drugs are just some of the problems that NHS patients have expressed genuine concerns about.

The NHS is still one of the best medical services in the world when it comes to emergency treatment. However, for non-emergency or specialist healthcare, many people find that ‘going private’ can be a lot quicker.

Private Medical Insurance (PMI) can offer people some reassurance that, should they fall ill, they will be able to get the very best healthcare, without waiting for months to see a specialist.

How PMI Works

PMI works just like any other insurance policy. You pay a regular premium, in return for a policy that will cover the cost of private medical treatment if you become unwell.

A PMI policy will give you access to private healthcare. You can arrange treatment at a time most convenient to you, and usually at a preferred hospital of your choice.

The level of treatment that the policy will pay for will depend on the type of plan you have chosen and the cost of the premiums you pay.

Is PMI Expensive?

Choosing to ‘go private’, instead of relying fully on the NHS, used to be considered prohibitively expensive and the sole preserve of the wealthy.

However, that misconception is now largely a thing of the past. Insurance companies have made PMI increasingly affordable, with a variety of different types of policies to suit all budgets.

Of course, the most comprehensive insurance policies will be the most costly. Although you can try to save money and reduce premiums by restricting your cover.

For example, some policies will allow you to limit your choice of hospitals, or of treatments, or they may place a cost ‘ceiling’ on the amount of healthcare you can claim for.

Lower your Premiums - Raise your Excess

You can also choose to pay an increased ‘excess’ amount. This ‘excess’ is the same principle that applies to other insurance policies. You pay the first part of any claim you make (anything from £50 up to £1,000), and the insurance policy provider will pay the rest. The larger your excess, the cheaper your premiums.

Paying an excess amount of £100 or £250 will help to keep your premium payments low, but it should also mean that you do not end up paying substantial amounts for treatment.

You might have to pay for an initial consultation, but once the excess payment has been reached your policy will continue from that point on.

Opting for a policy with a ‘restricted hospital’ option is also a good way of keeping premiums affordable. However, it makes sense to be sure that the hospital available to you is convenient and easy to get to if, for example, you have an accident or illness that prevents you from driving a car.

Pre-Existing Conditions

Most insurance policies are designed to protect their clients from unknown events that have not taken place yet. Insurance companies will therefore generally not insure someone against an existing condition or illness, or something you have already discussed with your doctor.

Your policy may not pay out if the policy provider believes that you knew about the condition and did not reveal it to them when agreeing the policy’s terms and conditions.

Most PMI plans also have a list of excluded illnesses or treatments, including infertility treatment, alcoholism and drug addiction, self-inflicted injuries or cosmetic surgery.

No two PMI policies are the same, and insurance companies are more than happy to tailor each individual policy to suit your precise needs. If you are looking for peace of mind, make sure that you arrange an appropriate level of cover that you feel comfortable with and that you will be able to afford.

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