Health insurance
There are many different insurance products aimed at helping you soften the financial blow of medical expenses you may have to incur.
Some offer access to private care treatment (private medical insurance), and some pay a limited amount towards everyday medical bills (health cash plans).
Your employer may offer some of these in your benefits package or you can take them out yourself.
In this section we cover the following:
What it does
Every UK resident is entitled to free healthcare from the NHS, but you may consider buying health insurance so that you can have a choice in the level of care you get. You don't have to take out health insurance but think about how you'd be able to afford medical treatment if you didn't want to use the NHS.
Like all insurance the cover you get varies – but basic private medical insurance may pick up the costs of most in-patient treatments (tests and surgery) and day-care surgery, and some extend to out-patient treatments (such as specialists and consultants).
Cover can be purchased on a full medical underwriting basis, which means you will be asked a number of questions about your health and, based on the information you provide, the insurer will decide the conditions of your cover. You can also apply for cover on a moratorium basis, which means you will not be asked any questions about your health, but if you have suffered from any health conditions in the last five years, these will automatically be excluded from cover initially.
What isn't covered
- You can't take out cover now for treatment you know you're going to need.
- If you've had health problems in the past (pre-existing conditions), your insurer may also exclude those conditions from your cover. If you are asked to disclose these when applying for the insurance you must do so, or you could invalidate your policy, which means the insurance company won't pay out if you make a claim.
- It does not cover the treatment of chronic medical conditions. There are various definitions of chronic conditions depending on the policy, but broadly it is a long-term medical condition which is likely to continue to need regular or periodic treatment.
- Some exclude certain types of treatments such as out-patient treatments, routine treatments (such as health checks), dental care or experimental treatments.
- Most also exclude routine pregnancy, HIV/AIDS, fertility treatment, mental or psychiatric conditions, and elective treatments you may choose to have, such as cosmetic surgery.
Keeping costs down
Shop around – it's a competitive market out there and both cover and costs vary from company to company. Many policies have a standard excess charge which means you agree to pay the first part of any claim, for example the first £50 or £100. If you agree to pay a higher excess you might get a cheaper policy. Or you could choose cover that only kicks in if NHS services are not available within a certain timeframe.
Be clear about what you need. You may not want the highest level of cover. Always compare what's covered by a policy, not just the price. Some may be cheaper than others, but they may not offer the same level of protection.
What it does
A health cash plan provides limited cash sums towards everyday healthcare bills. Different policies cover one or a combination of healthcare such as dental care, optical care, physiotherapy, or stays in hospital.
So for example a policy will pay out a maximum of £100 per year towards optical care bills you have incurred, and £10 for each night you need stay in hospital (up to a maximum of say 16 nights). Most providers offer a range of covers with different levels of payouts, and the smaller the payouts the cheaper the premiums.
What isn't covered
Some policies have age restrictions and will only cover you if you are under a certain age (often 65). If you've had health problems in the past (pre-existing conditions), the cash plan may not pay out on certain types of healthcare. Some plans also apply qualifying periods which means that they will not pay out towards any treatment undergone in the first few months of the policy, so shop around and make sure you get the cover you need.
What it does
Dental insurance is a type of health cash plan that focuses on dental care. Most of these pay for treatments such as crowns, root canal work, bridges and dentures up to an agreed maximum each year. If your teeth are in good health you can also take out a capitation scheme: you pay a monthly fee in return for check-ups, regular treatment, X-rays and extractions.
What isn't covered
Check your plan carefully. More serious work such as oral cancer, surgery and serious dental abscesses are often excluded. Some plans apply qualifying periods which means that they will not pay out towards any treatment undergone in the first few months of the policy, so shop around and make sure you get the cover you need.
Top tips
- Read the paperwork and ask questions if you don't understand anything.
- Make sure you check what you're covered or not covered for.
- Tell the insurance company if you have any existing medical conditions.
- Find out if your employer provides health insurance as part of your benefits package.
