How Private Medical Insurance Works
An introduction to Private Medical Insurance (PMI)
This article will aid in your understanding of how Private Medical Insurance works and to help you decide if it’s right for you. The information here is based on the general guide provided by the ABI (Association of British Insurers).
Private Medical Insurance is typically designed to cover ‘acute conditions’. Examples of acute conditions include “curable” illness, injury, or disease. Private Medical Insurance, or PMI, is available for those who require quick, personal medical treatment in the event of an injury or illness. PMI patients are able to decide when they will be treated, at which hospital and can choose the doctor or specialist.
It is important to remember that PMI should be considered as an additional service to public medical treatment and is not designed to wholly replace the NHS. Certain conditions, such as terminal or chronic illnesses, may not be covered by Private Medical Insurance. In addition, accident and emergency services are typically outside the scope of the majority of private hospitals.
Choosing the right type of cover
When deciding on the type of Private Medical Insurance remember there are 3 main categories such as:
- In-patient treatment - Requires patient to stay in hospital overnight or for prolonged periods
- Day-patient treatment - Not required to remain in hospital overnight however, periodic visits may be necessary until you recover
- Out-patient treatment - You receive treatment at an out-patient clinic or hospital but do not require day-patient or in-patient treatment
As with most types of insurance, PMI also offers a range of cover depending on your needs or affordability. Limited cover policies tend to be the least expensive or you can opt for a wide range of cover to include all treatment facilities.
Before you buy any PMI policy, ask yourself what level of cover you think you'll need. If you want your policy to include all types of treatments, from in-patient to out-patient, or to be able to choose the hospital or doctor yourself, as opposed to allowing your insurance company to make this decision, then this will affect your overall premium.
Listed below are typical examples of what’s included with Private Medical Insurance and what is not.
Included:
- Policy will treat 'acute', short-term, curable conditions
- In-patient testing
- In-patient and day-patient surgery
- Hospital and nursing care
May Be Included:
- Out-patient diagnostic testing
- Out-patient treatments and consultations with a specialist
- Cover overseas
- If treated as an NHS patient, you could possibly receive a cash payment
Not Included (typically):
- Pre-existing conditions before buying the PMI policy
- Services by a GP
- Chronic conditions, also referred to as non-curable conditions
- Emergency and accident services
- Drug abuse, self inflicted injuries, cosmetic surgery, experimental drugs and so on
Always ask your PMI policy provider for full details as to what is and is not covered according to the level you require. Enquire about their 'Key Facts' illustration or summary of policy to understand the extent of cover you may receive.
There are many reasons why you might decide to purchase Private Medical Insurance. Perhaps for the peace of mind knowing you are covered in the event of an unexpected illness or injury and will receive prompt service. Or, maybe you would like the ability to choose the specialist or hospital where you receive your treatment.
If you decide on a PMI policy for some of your health related needs, remember to understand your insurer's policy and to ask questions relating to your needs. The higher level of cover you choose the more you can expect to pay. To avoid disappointment, be sure your insurance matches your needs and is affordable. Premiums go up with age so expect to pay more over time.
For more information on PMI you can read the online guide at the ABI website here
Published on October 24, 2007
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