Your money: Perils of going private

The Health Secretary, Frank Dobson, has a major challenge ahead of him to improve the state of the National Health Service.

The problems in the NHS have led to a rise in the number of cheap private medical insurance (PMI) policies available. But as more of us sign up for PMI, and some 6.5 million people have already gone 'private', the inadequacies of many of these budget plans are being revealed.

"Many people imagine that PMI offers them the kind of medical insurance offered in the US," says Philip Watson, a director at John Charcol Insurance Brokers. "But it's the wrong impression."

The biggest disappointments come from dental treatment and pregnancy. Mr Watson says that only major dental treatment is included on most plans and that pregnancies are only covered if there are complications.

Philip Watson believes that buying cheap is a mistake: "Don't skimp. A typical rate for a healthy male or female aged 25 to 40 should be pounds 25 to pounds 35 a month for reasonable cover outside London." This compares to a typical budget plan that charges pounds 8 a month.

l BUPA 0800 600 500; Legal & General Lifetime HealthCare 0500 669966; PPP healthcare 0800 335555; Prime Health 0800 779955; Norwich Union Healthcare 0800 142142; OHRA 01703 653663.