Private Medical Insurance: A beginner’s guide for everyone

September 21, 2015

If we lived in a country with no free healthcare, this could be a very different blog post indeed. But, love it or loathe it, the NHS offers comprehensive healthcare to every person who is lawfully entitled to be in the UK. As long as they usually live here, that is. From doctor’s appointments to emergency ambulance runs, it’s all covered. So the main question here then is, if we have the NHS, why would you need Private Medical Insurance at all?

We’re glad you asked. Let’s take a look at what it is, whether you might need it, and whether there are any alternatives.

What is Private Medical Insurance?

It’s a type of insurance that pays your medical bills (depending on your cover and excess) if you are treated privately for medical conditions such as illnesses, diseases or any other acute diagnosis.

Like most other insurance products, you pay a monthly Premium which covers you for a specific amount of time. The cost of the policy would be determined by a multitude of factors – things like the level of care you want and the excess you’re willing to pay before you make a claim. Different providers would offer different policies to suit your needs.

Do you need Private Medical Insurance?

That’s the key question here, and really, the answer is no. Blog over then. BUT WAIT! You see, there are actually a lot of good reasons to have it. The most important are the fact that you’ll get more choice over where and how you are cared for if you do become ill, how quickly you get seen, and you’ll probably have access to better quality facilities. Just think – no more NHS waiting lists…

Of course, all of this comes at a price and there may be some limited to the amount of treatment you can claim. But with so many providers offering different policies with different inclusions and exclusions, it’s worth shopping around to find the right deal for you and your situation.

We could also go down another interesting path here on the ‘do you need it?’ question, which is to do with your likelihood of getting a disease or being hospitalised. For example, if you’re a smoker, health insurance might be a good option as your chance of lung cancer (and indeed most cancers) is significantly higher. If you’re overweight, your chances of a heart attack are statistically higher. However, if you do fall into either of these categories there may be an additional premium, depending on the type of cover you take out.

Non-smoking, fit, healthy-eating, hardly-drinking yoga teacher? Well, perhaps you’ll decide you’re so low risk that you don’t need the extra cover at all.

What are the alternatives to Private Medical Insurance?

Well, the most obvious alternative is to use the NHS. It’s free, it’s wide ranging, and there will be local options available. But, perhaps a more interesting option, which could well give you the cover, speed and quality that you want, is to self-insure.

What does that mean? Well, instead of handing your money over to an insurer each month, you could put it in a savings or investment account specifically to pay for any health issues that may or may not come up. If you don’t get sick in the next ten years, then you’ve got a pot of money which has been compounding nicely. And if you did decide you wanted to pay for some private treatment, the money is there. The downside would be if you needed serious treatment in the first few years of saving and the pot didn’t have enough to cover the treatment. The upside would be having a big pot of money as an incentive to live a healthy lifestyle!

Perhaps a hedge option here would be to take out a policy which has a very high excess as well as creating your own health insurance pot. That way if it’s small, more conventional treatments that you’d like to have privately, your pot should cover it, and if you’re unfortunate enough to get something serious that requires expensive care, the insurance is there too.

The conclusion

For most people, unlike car insurance, which is a legal requirement, and home insurance, which is likely to be demanded by your mortgage provider, Private Medical Insurance is likely to be viewed as a bit of a luxury. But there’s no denying that it offers a greater level of care should you find yourself with serious health problems, and it comes with a huge slice of peace of mind too. Keep in mind that as with all of our blogs on our site, they’re not here to give you tailored advice – just to present some options.

If Private Medical Insurance is something you’re considering, we’re here to find you the best deal. And if the idea of self-insuring appeals, then we’re also here to guide you through your various investment options. Right. We’re off to our yoga class.



This article is for general use only and is not intended to address your particular requirements. It should not be relied upon in its entirety and shall not be deemed to be or constitute advice.

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