Figures released from the Association of British Insurers have revealed that in the UK alone over five million people have health insurance, and that £7.4m is paid out in claims every day. If you are taking out a health insurance policy for the first time it can be difficult to choose the right policy to fit your particular set of circumstances.
Basically, a private health insurance policy will pay for private treatment if you become ill. However, policies differ widely between providers so you need to check the terms and conditions very carefully of each policy before you sign on the dotted line. In general, private health insurance will pay out if you require treatment for acute medical conditions that are known to respond quickly to treatment, in addition to any necessary medical tests and surgeries.
Although policies do differ between insurers most tend to include cover for outpatient visits where you undergo diagnostic tests, and see a consultant. In addition, the majority of policies also cover the cost of an inpatient stay during which you may require tests and/or surgery, plus nursing care and hospital accommodation. Some policies may also include provision for drugs that are not available on the NHS, but nevertheless have been approved by the National Institute for Health and Care Excellence.
Most insurers offer extra cover as an add-on to your existing policy. Extra cover can include provision for complementary therapies, nursing care carried out at home, a private ambulance, parental accommodation if your child is an in-patient, and a twenty-four-hour advice line. Some insurers also offer cover for psychiatric care, but this tends to be a grey area as psychiatric conditions can fall into two different categories; long-term care which is not covered, and a curable illness, which is.
When deciding whether a health insurance policy is the right product for you then bear in mind that health insurance policies do not cover treatment for long-term conditions such as asthma and kidney dialysis. Nor do they cover treatment for normal pregnancy, non-essential cosmetic procedures, and illness arising from drug abuse.
When you start your search for a health insurance policy you will find that there are two main types of policy available. The first is fully underwritten insurance, and the second is moratorium insurance. The difference between the two is that if you apply for a fully underwritten policy you will have to provide the insurer with your full medical history, whereas if you apply for a moratorium policy you only need to supply the insurer with a limited amount of information. A fully underwritten policy will be more expensive, but the coverage on offer will be greater, whilst a moratorium policy will cost less, but will come with exclusions on many pre-existing conditions.
You need to take into account your age, and whether you prefer a policy that offers specialised insurance cover as some providers of health insurance offer specialised plans; for example, those designed specifically for the over 55s, or those that offer targeted cover for certain illness, including cancer. Most policies these days tend to be modular, so you will receive treatment for in-patient care as standard, but you can add cover for different eventualities to form a tailor-made plan that suits your particular circumstances.
Unlike many other forms of insurance, health insurance is not a ‘must have’ product, therefore you need to think carefully about whether you would benefit from the coverage provided by a health insurance plan. If you are fit and healthy you will find that purchasing health insurance is simple, with lots of different plans being available to you. However, if you do have pre-existing medical conditions then it will be more difficult to find a provider who is willing to insure you. In this case it may be beneficial to speak to an experienced insurance broker.
When you do find a suitable policy you can then take steps to make sure that you are getting the most out of your policy and keeping your premiums to a minimum. When you take out health insurance you will be provided with a list of hospitals in which you will be able to seek treatment. If you keep this list short then you may cut down on costs. Also, you need to consider whether you would be willing to undergo some treatment on the NHS; some policies offer discounted cover that gives you access to private treatment only if the NHS cannot provide it within a certain timeframe (usually six weeks). This is a good way of cutting down the cost of health insurance if the speed in which you receive treatment is your main priority.
All insurance policies carry a voluntary excess, which is the amount you need to contribute yourself when you make a claim. If you are able to contribute a reasonable amount towards any claim that you may make then setting a high excess will also result in a decrease in your premiums.
Unlike car and home insurance there is no benefit to be gained by switching your health insurance provider on a regular basis. As you age you begin to pose a greater risk to insurers therefore your premiums will rise, which makes it unlikely that you will find a better deal elsewhere. In addition, any health conditions that you have developed during the term of your current policy are very unlikely to be covered by a new insurance provider as they would automatically be classed as pre-existing conditions.