First time buying Private Medical Insurance? Here's what you need to know

If you are considering either a company scheme or your own personal insurance for the first time then we've pulled together a few of the key points that you need to know to ensure you get the right cover for your situation.

Private Medical Insurance – Group Schemes

If a Group Medical Insurance scheme is being considered for the first time then there are several options you should consider:

  • Annual Outpatient Cover – You can select outpatient ‘full refund’ or you can apply a financial cap which will provide a discounted Premium
  • Benefit Excess Payment – Many organisations will introduce an excess payment onto their policy. The excess payment (frequently £100) is payable once per member per year so is usually only paid on the first claim. Having an excess on a scheme will reduce the overall premiums and can influence claiming behaviour by the members.
  • Inpatient Cover – You can provide members with instant access to inpatient treatment or introduce a ‘six-week policy’ whereby inpatient treatment can only be taken when the NHS waiting list is longer. If an employee needs an operation but the NHS can carry out the procedure within six weeks then the member must utilise the NHS rather than the private cover.
  • Hospital Directory – There are many Private, NHS and combined hospitals throughout the country and they all vary in quality, facilities and accessibility. When you chose your group policy you should also consider the choice of hospitals relevant for your location and budget.
  • Payment Frequency – Some insurer will offer you a reduction for annual payment or a small percentage for paying monthly or quarterly.

Underwriting Options

There are many types of underwriting to consider and the options become more or less appropriate depending on your financial budget, reasons for offering PMI, ease of administration and time.

  • Full Medical Underwriting is where members will be fully underwritten at the point of enrolment with an insurer. This means the Insurer will take into consideration previous medical history and excluded may be applied for previously experienced medical conditions.
  • Moratorium is the easiest option to introduce and requires the lease amount of paperwork. There are no medical questionnaire to be completed as members will not immediately be covered for any medical conditions that existed (typically) five years prior to setting joining the PMI scheme. However, members may be able to have cover for previous medical conditions if after, 2 years of continuous cover, the member has been totally symptom and GP visit free for at least 12 months. Moratoriums do vary between Insurers.
  • Medical History Disregarded (MHD) allows members to claim for new and previously experienced medical conditions (provided the conditions is within the general rules). This is the most generous underwriting as a member can claim immediately for an ongoing medical condition so represents the highest risk for the insurer. There is a minimum group size (usually around 225 employees) and the premiums are loaded by about 30% to counter for the higher risk and higher chance of claims.
  • Continued Personal Medical Exclusions – This underwriting is the most common form of underwriting as it relates to companies who already have cover in place with another Insurer but wish to switch Insurer. It simply means that the new Insurer will accept the transfer of the group on the same underwriting terms that they previously had. It’s generally the only way a group scheme would consider changing Insurer.

Private Medical Insurance – Personal Scheme

If you are considering a Private Medical Insurance scheme then there are several key elements you need to consider when choosing your insurer:

  • Annual Outpatient Cover – You can select outpatient ‘full refund’ or you can apply a financial cap which will provide a discounted PremiumYou can select outpatient ‘full refund’ or you can apply a financial cap which will provide a discounted Premium
  • Benefit Excess Payment – Many organisations will introduce an excess payment onto their policy. The excess payment (frequently £100) is payable once per member per year so is usually only paid on the first claim. Having an excess on a scheme will reduce the overall premiums and can influence claiming behaviour by the members.
  • Inpatient Cover – You can provide members with instant access to inpatient treatment or introduce a ‘six-week policy’ whereby inpatient treatment can only be taken when the NHS waiting list is longer. If an employee needs an operation but the NHS can carry out the procedure within six weeks then the member must utilise the NHS rather than the private cover.
  • Hospital Directory – There are many Private, NHS and combined hospitals throughout the country and they all vary in quality, facilities and accessibility. When you chose policy you should also consider the choice of hospitals relevant for your location and budget.
  • Payment Frequency – Some insurers will offer you a reduction for annual payment or a small percentage for paying monthly or quarterly.

Underwriting Options

There are several types of underwriting to consider and the options become more or less appropriate depending on your financial budget, reasons for taking out PMI, ease of administration and time.

  • Full Medical Underwriting is where members will be fully underwritten at the point of enrolment with an insurer. This means the Insurer will take into consideration previous medical history and excluded may be applied for previously experienced medical conditions.
  • Moratorium is the easiest option to introduce and requires the least amount of paperwork. There are no medical questionnaires to be completed as members will not immediately be covered for any medical conditions that existed (typically) five years prior to setting joining the PMI scheme. However, members may be able to have cover for previous medical conditions if after, 2 years of continuous cover, the member has been totally symptom and GP visit free for at least 12 months. Moratoriums do vary between Insurers.
  • Continued Personal Medical Exclusions – This underwriting is often available to individuals who wish to change insurer at renewal but do not want to undertake one of the underwriting above. It simply means that the new Insurer will accept you on the same underwriting terms as you had previously. You must meet a certain criteria and you would need to confirm what medical conditions you have experienced as the Insurer will need to know what risk they are taking on.

Group Private Medical Insurance

Your employees are one of the most valuable assets of your company. We can help you find the best fit health insurance for your business.

Individual Private Medical Insurance

Health Matters are able to guide you through the different schemes, Insurers and options available for you and your family.

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