Rich Pickings

Planning for a healthy retirement is a second-to-none essential. James Matthews looks into the perks and pitfalls of private medical insurance

Private medical insurance offers numerous common-sense benefits, not least of which are access to increased medical resources, reduced hospital waiting times and a wider range of specialist treatments.

Downsides however need to be taken into account too, including the high cost of insuring yourself and your family against ill health.

Premiums can be expensive. Typically speaking, health insurance premiums tend to increase by around 3-5% per year, partly because of the increasing cost of treatment, and partly because people are living for longer. So, what should individuals look out for when considering a private healthcare package?

Benefits

Going down the private route means that you’ll have instant, on-demand access to care. Relying on the NHS can mean a longer wait for treatment, especially for rarer illnesses that require specialist expertise.

You’ll also have access to a wider range of resources. Private hospitals offer a comprehensive selection of treatments from the most basic to the more specialised and can give you ongoing recovery treatment such as physiotherapy, which might not be so readily available on the state.

In some cases, you may be able to get treatment that’s not available on the NHS at all, because it’s too expensive or not approved in state hospitals.

Buying power means more choice and more privacy. You can choose your own hospital, your own doctor, and you get your own private room.

Pitfalls

The price you pay will depend on your policy, and whether or not you choose to insure just yourself, or your family members as well.

According to the Money Advice Service, a typical family premium – covering two adults in their 40s and two children under 10 – can vary from £700 to £1,800 per year.

The cost of private cover tends to go up most years, and can go up even further if you make a claim. Location can also affect the cost of treatment, so if you decide to move house, you may see a change in the price of your premium.

Private insurance doesn’t cover all conditions. Heart disease, diabetes, high blood pressure and some incurable cancers will often be excluded from a policy.

With the exception of some prescriptions, eye tests and dental services, NHS treatment is free at the point of use, even if you have a serious disease.

Buy wise

• Medical insurance isn’t like car insurance, where you can cut the cost of your premium by switching.
• An older client will be classed as higher risk to an insurance company. If you go to a new insurer, they are less likely to cover any pre-existing conditions.
• In some cases, you can reduce the cost of your premium by taking advantage of no-claims discounts, depending on the provider.
• Shop around and speak to a few providers. Check via comparison sites to see what prices are available to you before making a decision.