1 About this guide
2 What is private medical insurance?
3 How do I buy private medical insurance?
4 Will I need to give details about my health?
5 How do I choose the right cover?
6 What is and is not covered?
7 What if I have a disability?
8 Will my premiums (payments)
increase over time?
9 What if I want to change to a new insurer?
10 Points to remember
11 How is private medical insurance regulated?
We have designed this guide to help
you understand more about what
private medical insurance (PMI)
in the UK is, why people buy it,
and how it works, so that you
will be able to make an informed
choice before you buy a policy.
We publish this guide on behalf of
all insurers who offer PMI, whether
they are our members or not. The ABI
is the recognised trade association
that represents insurance companies
working in the UK. Our members
make up more than 90% of the
UK’s insurance business.
As well as this guide, the information
you receive from PMI companies
will tell you more about the products
that you are considering buying. They
outline what is, and is not, covered.
Remember that products from
different companies will vary. If you
have any questions, your financial
adviser or insurance company will
be able to answer them.
Don’t confuse private medical
insurance with other types
of insurance.
Private medical insurance is often called
‘health insurance’, and can sometimes
be confused with other types of
insurance such as health cash plans,
income protection and critical illness.
We publish guides on these types of
insurance if you’d like to know more.
Private medical insurance 5 Private medical insurance 5
2 What is private medical insurance?
Private medical insurance is designed
to cover the costs of private medical
treatment, for what are commonly
known as ‘acute conditions’ that
start after your policy begins.
Most insurers define an acute condition
as a disease, illness or injury that is
likely to respond quickly to treatment
and aims to return you to the state of
health you were in immediately before
suffering the disease, illness or injury,
or which leads to your full recovery.Your
insurer can tell you about their cover for
this and other conditions, such as cancer
and chronic (long-term) conditions.
Why buy private medical
insurance?
Most people buy this type of insurance to:
•
be reassured, knowing that treatment
is available quickly if they become ill
or are injured;
•
have a choice about when treatment
will take place, the specialist who
treats them and the hospital; and
•
have the privacy of an en-suite room
with a TV and other home comforts.
How does private medical
insurance work?
Although policies can be different,
medical treatment usually has to
start with a referral by your GP to
an appropriate specialist.
Before you arrange any private
treatment, you should call your
insurance company to check that you
are covered for the treatment. In fact,
most insurers need you to do this.
Stay in touch with your insurer at
each stage of your treatment. Your
insurer will confirm if you are covered.
Treatments for some illnesses, including
pre-existing conditions (conditions
from which you are already suffering,
or have already had) will not be covered
by a private medical insurance policy
(see section 4 of this guide). It is also
important to remember that private
medical insurance is designed to work
alongside, not to replace, all the services
offered by the NHS. Some services,
such as accident and emergency, are
not available at most private hospitals.
6 Private medical insurance 6 Private medical insurance
3 How do I buy
private medical insurance?
Private medical insurance is provided
only by insurers and may be bought:
•
direct from the insurer;
•
through an independent adviser; or
•
through an agent (bank, building society
or retail outlet, such as a supermarket).
You can apply for insurance:
•
over the phone;
•
face-to-face;
•
using the internet; or
•
by post.
If you’re using the internet, try searching
under ‘health insurance’ as well as
‘medical insurance’.
An insurer, or an agent who sells policies
on an insurer’s behalf, is only able to
discuss that insurer’s own policies. An
independent adviser offers policies from
a range of insurers.
Independent advisers give you
recommendations after assessing your
needs. They are responsible to you for
the advice they give. If you buy direct
from an insurer or an insurer’s agent
they will also assess your needs. But,
they can only give you advice on which
of their own policies best suits you.
Your adviser must explain whether
they are:
•
independent;
•
advising on a range of insurers; or
•
a representative of one insurer.
If you buy direct from an insurer or
insurer’s agent without receiving advice,
it is your responsibility to choose a
policy that is right for you.
You will be asked to fill in an application,
and will probably be asked for
information about your health. Your
application, or any declaration you make
to your insurer, is very important. In
fact, it forms the basis of your contract
with your insurer. You must answer any
questions you are asked as fully and as
accurately as you can, to the best of
your knowledge and belief. If you don’t,
your insurer may refuse to pay your
claim and could cancel your policy.
Once your application has been
accepted you will be told when cover
will start.
Cancellation period
Your insurer will send you policy
documents when your policy has been
set up. You have at least 14 days from
the day you receive them to decide
whether the product is suitable for you.
If you want to cancel your policy, you
must do so within the stated period
and tell the insurer that you want to
cancel your cover. If you have made any
payments you will usually receive a full
refund unless you have made a claim.
4 Will I need to give details
about my health?
Private medical insurance 7
You won’t normally be covered for any
illnesses you are currently suffering
from, or have already had. These are
known as ‘pre-existing conditions’.You
must answer all questions as fully and
as accurately as you can, to the best of
your knowledge and belief.
There are two main methods that
PMI companies use to deal with your
application for cover. These are:
•
full medical underwriting; or
•
moratorium underwriting.
All PMI companies will offer you the full
medical underwriting option. Only some
companies offer the moratorium option.
Full medical underwriting
(medical history declaration)
You are asked to give details of your
medical history. The insurer may write
to your doctor for more information,
but they do not do so in every case. You
must give all the information you are
asked for. If you don’t, your insurer may
refuse to pay any claim that you make
in the future, or may cancel your policy.
If you are not sure whether to mention
something, it is best to do so. If you
have a medical condition that is likely
to come back, the insurer will issue
a policy, but that condition (and any
related to it) might not be covered.
This condition may never be covered,
or not covered for a set period of time.
Moratorium underwriting
You are not asked to give details of your
medical history. Instead, the insurer does
not cover treatment for any medical or
related condition that you have received
treatment for, taken medication for,
asked advice on or had symptoms of.
In other words, you will not be covered
for any condition that existed in the
past few years. Five years is the usual
time period.
These conditions may automatically
become eligible for cover. But this will
only happen when you do not have
symptoms of, or receive treatment,
medication, tests and advice (from
your GP, a healthcare professional or a
specialist) for that condition, usually for
a continuous period of two years after
your policy has started.
You do not need to tell the insurer about
your medical history when you take out
the policy.Your insurer might ask for
medical notes that are needed to decide
if your claim can be covered.
There are some conditions, for example
chronic conditions, that will probably
never be covered.This is because you will
always need treatment, medication, tests
or advice for them.You should not delay
getting medical advice or treatment,
simply to get cover.
Your insurer will give you information
explaining how their moratorium works.
You may also want to ask the insurer or
adviser, to explain this.
8 Private medical insurance 8 Private medical insurance
5 How do I choose the right cover?
You should check to see if you
already have PMI cover. Some
employers include PMI as part of
their benefits package. Even a club
or professional organisation might
have arrangements to offer you
(and your family members) cover
at better rates.
If this is not the case and you want to
take out cover yourself, you need to
think about what benefits are most
important to you. When looking at
cover, it is useful to know how much
medical treatment costs, so you know
how much cover to buy.
There are lots of different sorts of
policies, from low cost, offering limited
cover, to those that offer wide-ranging
cover and benefits. Most policies offer
cover for inpatient and day-patient
treatment, but not always outpatient
treatment and diagnostic tests.
You will need to decide what sort of
cover you want. There are a number
of things you will have to consider.
•
How much do you want to spend?
•
Do you want to pay for part of
your treatment?
•
Do you want your cover to include
seeing a specialist and having
diagnostic tests (for example, X-rays
and blood tests) as an outpatient?
•
Do you want a choice of hospitals,
or would you be happy to have any
treatment that you might need, in a
hospital available from a limited range
chosen by your insurance company?
•
What am I not covered for?
The answers you give to questions such
as these, could have a significant effect
on how much you pay (see section 8).
The more your cover includes, the higher
your premiums are likely to be. The
following diagram is an example of
how you might get healthcare.
Private medical insurance 9
Visit your GP
Your GP needs to refer you for
investigations or treatment.
GP refers you to a specialist
This usually includes initial
consultations and diagnostic tests.
Your specialist needs to refer you
to hospital for more investigations
or treatment.
Hospital
This may be a private hospital
or private facilities within an
NHS hospital.
After leaving hospital you will usually
have a follow-up visit to your specialist.
Follow-up visit
Specialist consultation and a review
of your treatment.
Inpatient
or Day patient
treatment
Outpatient
treatment
Start to claim
If your policy includes
outpatient treatment and
your claim is eligible, you
can claim after your GP has
referred you to a specialist.
Outpatient
treatment
Healthcare is
divided into the
following groups.
Outpatient
A patient who attends a hospital,
consulting room, or outpatient
clinic and is not admitted as a
day patient or inpatient.
Day patient
A patient who is admitted to
a hospital or day-patient unit
because they need a period of
medically supervised recovery but
does not stay in a bed overnight.
Inpatient
A patient who is admitted to
hospital and who stays in a
bed overnight or longer, for
medical reasons.
Private medical insurance 9
Visit your GP
Your GP needs to refer you for
investigations or treatment.
GP refers you to a specialist
This usually includes initial
consultations and diagnostic tests.
Your specialist needs to refer you
to hospital for more investigations
or treatment.
Hospital
This may be a private hospital
or private facilities within an
NHS hospital.
After leaving hospital you will usually
have a follow-up visit to your specialist.
Follow-up visit
Specialist consultation and a review
of your treatment.
Inpatient
or Day patient
treatment
Outpatient
treatment
Start to claim
If your policy includes
outpatient treatment and
your claim is eligible, you
can claim after your GP has
referred you to a specialist.
Outpatient
treatment
Healthcare is
divided into the
following groups.
Outpatient
A patient who attends a hospital,
consulting room, or outpatient
clinic and is not admitted as a
day patient or inpatient.
Day patient
A patient who is admitted to
a hospital or day-patient unit
because they need a period of
medically supervised recovery but
does not stay in a bed overnight.
Inpatient
A patient who is admitted to
hospital and who stays in a
bed overnight or longer, for
medical reasons.
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6 What is and is not covered?
Remember, private medical insurance
is designed to cover treatment for
curable, short-term illness or injury.
These are called ‘acute conditions’.
Some illnesses and treatments are
rarely covered.
PMI isn’t designed to cover the
long-term treatment of chronic
conditions for a number of reasons.
•
The private-hospital sector’s main
purpose is to treat conditions that
can be cured, or mostly cured, quickly.
•
A large part of the NHS’s funding is
to care for patients with long-term
conditions. So, for example, patients
What your PMI might cover
with diabetes can go to clinics, be
regularly monitored and have their
insulin needs met. This will often
happen locally, in a primary-care
setting such as their GP surgery.
As well as the practical reasons
mentioned before, insurers also have to
balance how much cover they provide
with what you are willing to pay for
that cover. So, insurers don’t cover
the treatment of long-term (chronic)
conditions. This is because their
premiums would become too expensive
for most people.
Usually
included
Inpatient tests Surgery as an
inpatient or
day patient
Hospital
accommodation
and nursing care
Cash payment
for treatment
received as an
NHS inpatient
Sometimes
included
(as part of the
policy or if
you ask for it)
Outpatient tests Outpatient
consultations
and treatment
with a specialist
Overseas cover Therapy,
for example,
physiotherapy
and
complementary
therapy
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The following conditions or treatments are normally not included in your cover.
•
Going to a general practitioner (GP)
•
Going to Accident and Emergency
•
Drug abuse
•
HIV/AIDS
•
Normal pregnancy
•
Gender reassignment (sex change)
•
Mobility aids, such as wheelchairs
•
Organ transplant
•
Injuries you get from dangerous hobbies (often called hazardous pursuits)
•
Conditions you had before taking out the insurance (commonly known as
pre-existing conditions – see section 4)
•
Dental services
•
Outpatient drugs and dressings
•
Deliberately self-inflicted injuries
•
Infertility
•
Cosmetic treatment
•
Experimental or unproven treatment or drugs
•
Kidney dialysis
•
War risks
Your insurer will give you a summary of your policy, or Key Features Document, and
a full policy document, either before or straight after your insurance contract starts.
The summary of your policy or Key Features Document will set out any important
or unusual limits of the policy, as well as the main monetary limits.
7 What if I have a disability?
You will not be refused cover because
you have a disability.As with other
pre-existing conditions, your
insurer might not include cover for
treatment that is needed because of
your disability. However, it must be
reasonable and fair for them to do this.
If you sign a declaration about your
medical history, you must give all
relevant information about your
disability. If your policy does not cover
pre-existing conditions, an existing
medical condition causing disability,
or arising from it, will not be covered.
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8 Will my premiums
increase over time?
Even with the wide range of PMI
policies available, it is likely that
whatever policy you choose your
premiums will rise above the rate
of general inflation.
Advances in modern medicine mean
that doctors are able to identify some
conditions earlier than ever before. For
example, a patient who had a heart
attack 20 years ago might have been
treated with a heart bypass operation.
Today they might be offered a pacemaker
before a bypass is considered. The cost of
healthcare will increase when:
•
new drugs, such as Herceptin and
Avastin for the treatment of cancer,
become available;
•
the methods used to diagnose
Indexed price
350
300
250
200
150
100
50
0
conditions become more
advanced, which means patients
can be treated more quickly,
and are used more; and
•
the technology used in surgery
becomes more advanced.
PMI tries to keep up with new medical
developments, as they become
established medical practice. As you
get older you are more likely to need
treatment. Premiums usually increase
with your age to reflect this. The
graph below shows how premiums
can increase with age. This is only an
example and will vary depending on
your insurer.You can always ask your
insurer to give you advice about their
current rates at different ages.
Comparative price by age
The indexed price is how much the price increases when
compared to the price at age 35. So, the indexed price at
age 35 is 100. When you are aged 70 it is around three
times the price for someone aged 35.
Indexed price
35 40 4550 5560 6570
Age
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Can I reduce my premiums?
You may be able to reduce your
premiums by choosing from:
•
a reduced level of benefits,
such as limited outpatient cover;
•
a specific range of hospitals;
•
an excess on your policy, where you
pay the first part, say £100, £200 or
£500 of any treatment, either each
policy year or each claim;
•
a policy with ‘co-insurance’ where
you agree to pay a set percentage
of any claim and the insurer pays
the balance until you have paid an
agreed yearly amount (after this the
insurer pays 100%);
•
a policy that offers a no-claims
discount or a discount that depends
on your commitment to health,
including exercising regularly and
not smoking;
•
having treatment on the NHS, if
this is available within 6 to 12 weeks
of being diagnosed, rather than in
a private hospital; and
•
receiving a discount by changing
how you pay.
9 What if I want to change
to a new insurer?
You can change your PMI company.
If you want to switch, there are four
main things you need to consider.
Existing conditions
Some insurers may match your
exclusions (what is not included in
your cover) and add these to your new
cover. They will not add any new ones.
However, some insurers might not cover
illnesses or injuries you have had in the
past or any condition that you suffer
from now, even if these are covered by
your current insurer.
Comparing your cover
Even if your personal medical exclusions
stay the same with your new insurer,
the overall cover is likely to be different.
You should:
•
compare the benefits of each insurer;
•
compare any cover limits or monetary
amounts; and
•
ask questions about how the
cover works.
Paperwork
Paperwork varies from one company
to another, but there’s likely to be an
application form to sign and you might
need to provide a copy of the policy
certificate from your current insurer
as proof of your current cover.
When you choose to switch
Usually, private medical insurance is
offered through an annual contract. If
you are thinking of switching to another
insurer, it’s best to consider doing this
at your renewal date. At any other time,
check if you will lose any payments.
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10 Points to remember
•
You must give full and accurate
information to your insurer
or adviser. This will avoid your
claim being refused or your
policy being cancelled.
•
You should read all the policy
documents and terms carefully,
now and in the future. Keep all
documents safe.
•
You need to keep your
payments up to date.
If you don’t your cover
will stop and only eligible
treatment costs from before
the cancellation date will
be included.
•
If your policy is a yearly
contract, you will be sent details
of changes to benefits, rules or
premiums before your renewal
date.Your insurer cannot cancel
your policy just because you
have claimed or your health has
got worse.
•
Before you change insurers
you should check the benefits,
policy terms and underwriting
position carefully to understand
the consequences. The cover
offered may not be the same.
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11 How is private medical
insurance regulated?
Financial Services Authority
The Financial Services Authority (FSA)
was set up by the Government to provide
a single regulator for financial services.
The FSA is committed to protecting you
and promoting your understanding of
the financial system. The FSA has a list
of authorised companies.
The FSA regulates insurers, independent
intermediaries (sometimes called
insurance brokers) and advisers. The FSA
has set out rules about the selling and
providing of general insurance. These
rules must be followed by those dealing
with you. Website: www.fsa.gov.uk
Compensation
The Financial Services Compensation
Scheme (FSCS) is the UK’s legal fund
for customers of authorised financial
services firms. The FSCS can pay
compensation if a firm cannot, or
is likely to be unable, to pay claims
against it. The FSCS is an independent
organisation, set up under the Financial
Services and Markets Act 2000. This
service is free. Website: www.fscs.org.uk
Confidentiality
By law, specifically the Data Protection
Act 1998, all insurers have to treat
sensitive and personal information
confidentially, especially medical details.
When you are asked for information,
you will be told what it will be used
for, who it may be given to and in what
circumstances. You can ask to see any
information we have about you.
Totally anonymous statistical
information is sometimes given to
outside organisations, so they can
carry out research.
Insurers might use email to
communicate with you. If you choose
to communicate with your insurer
in this way, you must make sure your
email address is private and cannot
be used or seen by anyone else.
Complaints
All insurers, and anyone else advising
on private medical insurance, must have
their own complaints procedures in
place. They must also be covered by the
Financial Ombudsman Service (FOS).
This means that if you have a problem
with any part of your cover, you should
speak to your insurer or adviser first.
If you are not happy with the way your
complaint is handled, the FOS offers an
independent service to help settle your
dispute. This service is free.
www.financial-ombudsman.org.uk
Association of British Insurers
51 Gresham Street
London EC2V 7HQ
Phone: 020 7600 3333
Fax: 020 7696 8999
Email:
info@abi.org.uk
www.abi.org.uk
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