Should I buy private medical insurance?
Now that the British recession is in full swing, most of us are feeling the pinch. As a result, many people are choosing to cut back or reduce essential insurance cover in an attempt to relieve the strain on their already stretched budgets.
This can be a risky move. Without the right home, life or travel insurance policy in place, you could end up facing financial disaster if something unexpected were to happen.
Yet, surprisingly, private medical insurance (PMI) seems to have fared well during the economic downturn. According to recent research by the Association of British Insurers (ABI ), the number of people in the UK who are covered by private medical insurance has increased by 2.7% since 2007.
So why has PMI remained so popular?
The perks of PMI
If you hold a PMI policy, you’ll have access to private medical care in the event you experience health problems.
One of main reasons many people opt for PMI is to ensure they are able to leapfrog long NHS waiting lists. Although the Health Service recently met its 18 week waiting time target, a survey by Bupa showed that more than 80% of Britons still feel this is too long to wait for medical treatment.
Swifter access to healthcare could mean you are back on your feet and fitter, faster. This is particularly important in the current economic climate; having to take weeks off work while you wait for treatment could leave you with a financial headache on top of any real-life aches and pains.
However, Bupa’s research reveals cleanliness is the key issue that motivates many people to opt for private medical care. With ‘superbugs’, viruses and infections like MRSA never far from the front pages, it seems people are panicking about the standard of hygiene in British hospitals.
PMI also has other, perhaps more luxurious, benefits - include having a say in which hospital you are treated at and which specialists you see. In addition, private patients are often housed in private rooms rather than on wards.
Perhaps of equal importance, though, is the perception that private hospital food might be tastier than NHS grub. (On my latest NHS hospital excursion, I ended up having to crack into my Yorkshire pudding by hand because my knife failed to pierce its rock hard surface!)
The pitfalls of PMI
However, it is worth noting that PMI policies do not offer unlimited benefits. There are many rules – usually called exclusions – that often prevent customers from claiming for certain treatments.
For example, PMI will not usually offer you cover for emergency treatment, long-term illnesses, pre-existing conditions or incurable illnesses.
Other common exclusions include medical conditions arising from alcoholism or drug abuse, complications arising from cosmetic surgery and mental illnesses.
Always check the terms and conditions of your PMI policy before signing on the dotted line. The benefits you’re eligible to claim will vary enormously depending on the type of cover you have chosen.
If you're considering taking our a PMI policy, BeatThatQuote.com's insurance service could help; you'll be put in touch with a Financial Services Authority-regulated consultant who'll be able to advise you on the type of cover that will suit you best.
Finally, remember that even if you do go private, the standard of actual medical care you receive will not necessarily be better than that you would have access to through the National Health Service – even though you will probably be treated faster and in more comfortable surroundings.
Four steps to help reduce PMI premiums
1. Check with your employer. Before you take out an individual PMI policy, check to see whether you are covered by a company scheme. More and more employers seem keen to take some responsibility for their employees’ health and wellbeing. If your employer doesn’t have a scheme, it is worth checking to see if you can be included under your partner’s company policy.
2. Lower the risk. All insurance premiums are calculated based on risk. Therefore, to lower the price of your premium you need to reduce the likelihood you will need to claim on your insurance policy. If you are overweight or a smoker, you are likely to have to pay more for your cover – so if you have recently dropped a few dress sizes or gave up smoking a minimum of 12 months ago, now could be a good time to compare PMI policies.
3. Limit your options. Often, PMI premiums cost less if you limit the type of treatment covered by your policy. For example, you could restrict the choice of hospitals that you can be treated at or place time and cash limits on your treatment.
4. Shop around. One of the best ways to find the cheapest deal is to shop around using a price comparison website, comparing quotes from a range of companies. As you compare, remember to check the types of cover on offer from each provider and look at what is excluded. The more comprehensive your cover is, the more you will probably have to pay.
Paying for peace of mind
It appears many people would prefer to make cutbacks elsewhere than lose the peace of mind they get from having a PMI policy in place. I can certainly see the appeal of knowing medical treatment could be available at short notice, should I ever need it.
Furthermore, if you’re used to having PMI, it can be a difficult benefit to give up – especially if you’ve had a bad experience with the NHS in the past.
In today’s troubled times, PMI might be considered a luxury. However, if you can afford it, you may believe it is a luxury worth paying for.
**This material is for information purposes only and should not be considered financial advice. We strongly encourage our readers not to rely solely on this content, but to seek independent advice when making financial decisions.**
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