Buying a health insurance policy can be a complicated process, and many people are unaware of the easy mistakes you can make when purchasing cover. Here are the top 5 "don'ts" when shopping for private medical insurance.
1. Choosing a budget policy
As with all insurance policies, your premiums will directly affect your level of cover. Although buying a budget PMI policy may seem like a bargain, you could actually lose money in the long-run. Cheap health insurance policies will have limits which it is important to be aware of.
2. Not checking the policy limits
On a basic policy, providers may put a limit on the maximum amount they will pay for a single medical condition, and on how long they will continue to cover it. For example, an outpatient limit of £500 would mean that you could only claim up to £500 a year for any outpatient treatment, and pay out of pocket for the rest.
Many customers are also unaware that budget health insurance policies will not include cancer cover. Even patients with basic cancer cover may only be able to claim up to a certain annual limit, such as £30,000.
This does not mean you have to purchase an expensive comprehensive policy. It is essential to customise your policy to suit your needs and budget.
3. Not customising your policy
Many insurers are moving away from the traditional approach to health insurance, which grouped policies into 'budget', 'standard' and 'comprehensive'. Now, customers can pick and choose what they would like covered, and what they don't mind receiving on the NHS.
Different people have different requirements for PMI. Instead of paying for what you don't need, many health insurers are now offering a 'core' policy, supplemented by additional options. This could include diagnostic tests and scans, full outpatient cover, full cancer cover, or dental and optical.
In addition, there are many discount schemes which can help save you money without compromising your cover, like paying an excess and limiting your hospital list.
A good health insurance comparison website will show you all the options from each different PMI policy, and allow you to tailor your quotes to suit your needs and budget.
4. Choosing an unethical company
When searching for a PMI policy, it can be a good idea to use a comparison website. However there are many unethical companies which claim to offer you instant online quotes, but actually take your details and sell them on to another company.
Always make sure the website you are looking at is FSA regulated, with its registration number displayed clearly at the bottom of the page. True comparison websites will always give a written description or demonstration of the service they provide. If the company does not offer these things, then it would be a mistake to give them your personal information.
5. Choosing the wrong underwriting method
Health insurance policies are not intended to cover pre-existing conditions. However, your underwriting method will determine whether your pre-existing conditions will be covered in the future. There are two common types of health insurance underwriting- full medical underwriting and moratorium.
If you choose full medical underwriting, then you will need to complete a Medical History Declaration, answering questions about your health. Full medical underwriting will usually exclude pre-existing conditions from the cover along with any conditions related to it.
If you choose this Moratorium, the insurer will automatically exclude any pre-existing medical conditions you have suffered from during the five years before your policy starts. However, if you go treatment, symptom and advice free for two continuous years after the start of your policy, your insurer will reinstate cover for that condition.
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