What is Private Medical Insurance?

The insurance industry is full of jargon, so the following are some commonly used terms to describe the types of health insurance products that are available.

Whilst the Financial Services Authority (FSA) distinguish the various health insurance policies available between Pure Protection and General Insurance, the definitions used here are as those determined by the CII (Chartered Insurance Institute).

Private Medical Insurance (PMI) provides funds to pay for the costs of private medical treatment in the event of you suffering from an acute condition. The purpose of PMI is to provide speedy treatment for a curable medical condition.

Long Term Care Insurance (LTCI) is a type of health insurance that pays out a regular sum in the event of you needing long term care. Therefore LTCI is more suited for the long term care needs of chronic conditions.

Why would I need Private Medical Insurance?

PMI should be considered for earners and non-earners who may at some time in the future find themselves requiring urgent medical treatment of acute but non-chronic condition, and/or may have a preference for private treatment.

Generally PMI is a way of mitigating or reducing the financial costs of providing private medical treatment for you, your partner’s or family and obtaining this treatment more quickly than would be received by the National Health Service (NHS).

For example, the benefit amount could be used to pay for medical expenses such as tests, drugs, consultation and surgery fees and hospital care expenses such as accommodation, nursing and ambulance fees.

Employers may have a Group PMI scheme which employees are entitled to join, and should be considered as they are likely to be easier to arrange and monthly premiums cheaper and than a private/individual policy.

Employees may also be members of their employers Group PHI (Permanent Health Insurance), but these are unlikely to cover the costs of private medical treatment as they are policies designed to provide an income only in the event of accident or sickness.

How much will PMI pay me on a claim?

The purpose of PMI is to provide payment for the private medical treatment covered by the benefits of the policy. Usually a choice of plans are offered providing comprehensive to budget plans, with excesses reflected in the cost of monthly premiums. Excesses will tend to be higher on budget plans.

How do I pay for Private Medical Insurance?

Once the benefits you require has been determined and plan exclusions considered the appropriate plan can be selected. This will determine your monthly payments or premiums for protection under the policy or cover which will be offered to you by the insurer’s underwriter after they have reviewed a completed personal questionnaire relating to your occupation and lifestyle including a medical report declaring all pre-existing medical conditions.

The monthly premiums are usually reviewable every year depending on the insurance provider i.e. the insurance company underwriting the policy.

How should I apply for Private Medical Illness Insurance?

The first and most important step after you have decided you may have a need for PMI is to have a discussion with us to provide you with independent financial advice.

Once we have agreed what the most suitable PMI plan is for your particular circumstances after assessing your needs we make an application and complete an underwriting questionnaire on your behalf to take out a private medical insurance policy based on how much you can afford and the type of benefit required to match your needs.

Want to know more?

Talk to one of our qualified financial advisers on 01553 777600 or e-mail us at enquiries@ringassociates.co.uk

Also you may want to read the articles by accessing the following at

the Financial Service Authority (FSA) consumer guide available on their website at http://www.moneymadeclear.fsa.gov.uk/products/insurance/types/health/private_medical_insurance.html

and the Association of British Insurers website at http://www.abi.org.uk/Public/Consumer/Medical/pmedins.pdf