Left out on an insurer's limb

Exclusions are a plague on medical policies, warns Dido Sandler on ways of optimising your medical policy

LAST week, the British Medical Association declared the NHS was in a state of crisis when a man died of a heart attack after being refused a bed at nine different hospitals. This sort of terrible event is driving more and more people into the arms of the private medical insurers. One in nine of the population are estimated to have some kind of private cover, and the figure is rising. Yet people fail to realise that many policies may prove to be of limited use - and may not actually pay up when the time comes. Often, they only protect against risk of ill health in the future, consigning any existing conditions to NHS care.

When one reader, Helena Fielder, applied to PPP Healthcare for a budget scheme, she was so outraged with the policy the company sent her, that she immediately wrote to ask for her money back. "It's riddled with exclusions to the point that it's really not worth my while having the insurance in the first place," she said. "It's really against my principles to take out this sort of thing. But my husband's sick, and is being made to wait 18 months for a heart bypass on the NHS. He's a real stoic about it. I just don't think I could bear that sort of wait myself."

Mrs Fielder is 51, she is fit and healthy, and runs her own soft furnishings business. However, PPP appears to have refused to cover any medical condition she ever suffered from in the past, regardless of when, and has added some extra exclusions to boot. She has had hearing problems with one ear for almost 20 years - they refused to insure the healthy ear as well as the bad one. She had back pain eight years ago, following a hysterectomy - all benefit was disallowed for any form of back trouble. Mrs Fielder has had high blood pressure for 10 years, but it is now controlled, though under regular medication. This was excluded, together with coronary heart disease and strokes. To cap it all, she had two moles removed 30 years ago for entirely cosmetic reasons. The insurer will not now allow her treatment related to moles.

Financial advisers offer the following tips to getting a better deal:

q First, kick up a stink with the insurer, says Alan Pickering of Watson Wyatt employee benefit consultants. A stiff letter to the chief executive will not go amiss, preferably backed up by a letter from your GP, with a more realistic view of the risk. Most insurers do actually underwrite conditions if they have not recurred in the past five years; PPP considers a person's entire medical history.

When we contacted PPP to discuss Mrs Fielder's case, the firm apologised to her and said it would now cover everything except her bad ear and high blood pressure.

q Anyone issued with a similarly exclusion-bound policy should shop around, as different companies have varying underwriting procedures. For instance, Exeter Health Care says it will cover conditions arising from high blood pressure, but not the treatment of the condition itself. Legal & General launched a medical insurance scheme last week that covers most of Mrs Fielder's pre-existing conditions, but not those arising from the blood pressure. Norwich Union's medical division will also insure against everything except the high blood pressure itself.

q One way of getting around the problem of pre-existing conditions altogether is to join your or your partner's company scheme - if either of you have one. Large schemes of 100 or more members insure you against new and existing problems alike. Penny O'Nions, a medical doctor and independent financial adviser specialising in healthcare, suggests people should get all possible problems sorted out courtesy of the company - like varicose veins or hernia - so that when you next apply for cover on your own account, the insurer can give you a clean slate.

q For those young enough not to have a recurring condition (called chronic), it could be well worth buying cover now. If you remain with the same insurer you will always be covered for any recurring problems you develop. Only if you try and change insurers, or possibly when you trade up policies, would the insurer make a reassessment and start excluding conditions.

But if you do buy while still young, then as well as looking at current prices, you should also take into account the company's premiums for old people - you do not want to lock yourself in, and then find yourself paying very expensive contributions later in life.

q Should you wish to complain about treatment meted out by medical insurers, the Insurance Ombudsman's office arbitrates on claims problems. It does not, however, get involved in initial underwriting decisions. The scheme is a voluntary one, and Bupa, PPP and CIS are not members. These three belong to the Personal Insurance Arbitration Scheme, which has fewer teeth.

q If you feel the insurance contract is unfair, the Office of Fair Trading has launched an inquiry into how policies are being sold. It would like to hear from individuals concerned about unfair or obscure clauses or exclusions in their policy.

q Disabled people who feel they are unfairly discriminated against by a company's underwriting policy may in future have legal protection from the new Government Disability Discrimination Act, which will shortly to become law.