Your money or your health – you decide

Price comparison may not be the best way to buy private medical insurance.

After a pension, private medical insurance (PMI) is the benefit most valued by employees. But PMI is offered by only a quarter of employers to all staff, and just one in 10 firms extend it to their immediate families.

Against this backdrop of patchy coverage, many people – particularly when they move from an employer offering cover to one which doesn't – choose to buy their own PMI. But how do you get the best price and policy? Savvy consumers will be used to comparing their car and home insurance online, but when it comes to PMI, sites struggle to cope with the complicated demands of matching these policies accurately.

One website hoping to change this is the newly launched ActiveQuote.com. "Historically, price comparison sites have tended to direct consumers to the cheapest products first, but with PMI, price is not the most important factor," says Richard Theo, the director of ActiveQuote.

In contrast to car and home insurance policies, PMI policies differ on many variables. So the few comparison sites that have included PMI do so only on a rudimentary level, with the focus firmly on price. ActiveQuote, however, allows you to refine your search, whether that involves adjusting the excess, choosing a different hospital list, or adding or removing dental cover. More importantly, you can specify which policy benefits are vital and the site will automatically remove quotes that don't fit the bill.

A potential shortcoming is that somecomparison sites don't provide quotes from all insurers, which could mean you miss out on the best possible deal. A better option may be to use comparison sites initially to get an idea of what you can get before looking for advice elsewhere.

"Advice and comparison sites should complement each other. Consumers want the right products at the right price, but if they are in any doubt they should always ask someone for guidance," says Emma Walker, the head of protection at price comparison service Moneysupermarket.

PMI is often seen as a luxury, particularly during a recession, but many people are still choosing to go private. The number of people covered by PMI rose to 6.25 million last year, a rise of 3.7 per cent on the previous year's figures, the Association of British Insurers (ABI) says.

PMI is designed to provide cover for what are known as acute conditions, which are defined as curable, short-term illnesses that are likely to respond quickly to treatment. Common exclusions to a PMI policy are pre-existing conditions, GP services, accident and emergency admission and cover for incurable long-term illnesses, which are referred to as chronic conditions such as infertility and kidney dialysis.

What PMI will typically pay for, however, is in-patient tests, surgery, hospital accommodation and nursing. All the details of exactly what an insurer will and will not cover are set out in the "key facts document". For example, with cancer, some insurers provide cover at every stage of the disease, while others can put limits on the length of time you can receive treatment and may stop paying after two years.

"Most insurers make a large play on the quality of their cancer cover. Many say that they offer 'full cover', but it's worth checking the details behind this," says Shaun Matisonn, the chief executive of provider PruHealth.

Policies vary considerably in the level of cover but the most expensive include dental, optical and even alternative therapy. At the other end of the scale, the cheapest plans will typically cover in-patient care only. Be truthful about your medical history or risk having a claim turned down.

With treatments becoming more sophisticated and expensive, the cost of PMI is likely to rise. They also increase with the age of the policyholder: someone aged 45 would pay 25 per cent more than someone aged 35, while a 65-year-old would pay more than double the premium of a 45 year old, according to the ABI.

Despite this, there are several ways you can cut costs. "Set yourself a realistic budget; ask yourself why you want the product to start with. Do you want to be able to get in and out of hospital quickly? Or are you looking for a bit of luxury if you fall ill?" says Ms Walker. Consumers should always opt for the best policy they can afford, she says. "Start at the top end of your budget and work your way down, deciding what you can do without."

As with any insurance policy, taking on a bigger excess will reduce premiums. If you opt to receive treatment at a specified hospital or choose a different grade of hospital accommodation – generally treatment in London hospitals and other major cities is costlier than elsewhere in the UK – you should be able to shrink your monthly costs. Other insurers allow policyholders to cut costs significantly by agreeing to use the NHS when treatment is available within six to 12 weeks. It's also useful to keep an eye out for extra incentives. PruHealth, for example, rewards customers with a healthy lifestyle with credits as part of its Vitality programme. Going to the gym, having regular check-ups and quitting smoking can earn you Vitality points, which can then help to reduce premiums later.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Guru Careers: Tax Manager / Accountant

    £35 - £50k DOE: Guru Careers: A Tax Manager / Accountant (ACA / CA / CTA) is n...

    Ashdown Group: Contracts Executive - City of London

    £35000 - £37000 per annum + benefits: Ashdown Group: Contracts Executive - Cit...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45K: SThree: SThree Group have been well esta...

    Recruitment Genius: Call Centre Debt Collector - Multiple Roles

    £21000 per annum: Recruitment Genius: This is an exciting opportunity to join ...

    Day In a Page

    Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

    US betrayal of old ally brings limited reward

    Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
    VIPs gather for opening of second Suez Canal - but doubts linger over security

    'A gift from Egypt to the rest of the world'

    VIPs gather for opening of second Suez Canal - but is it really needed?
    Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

    Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

    Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
    The male menopause and intimations of mortality

    Aches, pains and an inkling of mortality

    So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
    Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

    'How can I possibly be on the list with these writers I have idolised?'

    Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
    Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

    Bettany Hughes interview

    The historian on how Socrates would have solved Greece's problems
    Art of the state: Pyongyang propaganda posters to be exhibited in China

    Art of the state

    Pyongyang propaganda posters to be exhibited in China
    Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

    Vegetarian food gets a makeover

    Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks
    The haunting of Shirley Jackson: Was the gothic author's life really as bleak as her fiction?

    The haunting of Shirley Jackson

    Was the gothic author's life really as bleak as her fiction?
    Bill Granger recipes: Heading off on holiday? Try out our chef's seaside-inspired dishes...

    Bill Granger's seaside-inspired recipes

    These dishes are so easy to make, our chef is almost embarrassed to call them recipes
    Ashes 2015: Tourists are limp, leaderless and distinctly UnAustralian

    Tourists are limp, leaderless and distinctly UnAustralian

    A woefully out-of-form Michael Clarke embodies his team's fragile Ashes campaign, says Michael Calvin
    Blairites be warned, this could be the moment Labour turns into Syriza

    Andrew Grice: Inside Westminster

    Blairites be warned, this could be the moment Labour turns into Syriza
    HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

    The mystery of Britain's worst naval disaster is finally solved - 271 years later

    Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
    Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

    'I saw people so injured you couldn't tell if they were dead or alive'

    Nagasaki survivors on why Japan must not abandon its post-war pacifism
    Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

    The voter Obama tried hardest to keep onside

    Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen