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Private medical insurance covers the cost of private treatment so you are not sitting on a waiting list. What actually decides whether a policy is any good is which hospitals you can use and what it will not cover.
The levers that set your premium
Two policies with the same name can differ enormously. These are the three settings that move both the price and the usefulness.
- What it covers
- Private diagnosis and treatment of new conditions
- Key choices
- Excess, hospital list, outpatient limit
- Pre-existing
- Usually excluded, at least initially
- Renewal
- Priced again every year
The excess
What you pay towards a claim each year. Raising it is the simplest way to bring a premium down without cutting what is actually covered.
The hospital list
Insurers group hospitals into lists. A wider list costs more. Check the one you would actually want to use is on the list you are buying.
Outpatient cover
Consultations, scans and diagnostics before any treatment starts. Often capped or limited, and often the part people find they needed most.
How we arrange it
Decide what you want it to do
Fast diagnosis and treatment of new problems is what it does well. It is not a replacement for the NHS in an emergency.
Choose the underwriting basis
Moratorium is quicker and asks fewer questions up front. Full medical underwriting asks more now but leaves you clearer about what is covered.
Set the excess and the hospital list
The two biggest levers on price. We will show you what a few combinations actually cost.
Review it every year
Premiums are re-rated at renewal and rise with age and claims. Reviewing is not the same as switching, which can restart exclusions.
Paying for it through a limited company
A company can pay for private medical cover for its directors and employees. It is allowed and it is common, but it is treated quite differently from most other cover a business buys, and the difference lands on your personal tax bill.
What the company gets
The premium is normally an allowable business expense, so it reduces taxable profit in the same way as other staff costs.
What you get taxed on
Unlike relevant life cover, private medical insurance is a benefit in kind. Its value is reported on a P11D or payrolled, and you pay income tax on it personally.
What the company also pays
Class 1A National Insurance is due on the value of the benefit, on top of the premium itself. Budget for both, not just the quote.
- Sole traders cannot do this. There is no employer and no employee in the arrangement, so the cover is simply a personal expense.
- A more expensive policy costs you twice. Because the benefit in kind is based on what the company pays, upgrading the hospital list raises your personal tax bill as well as the premium.
- Covering several people changes the options. Once you are insuring more than one or two, a company scheme may come into range. Those can be cheaper per head and are sometimes underwritten more generously than individual policies.
- It usually ends when you leave. Cover is tied to your employment. Continuing it personally normally means fresh underwriting unless the insurer offers a continuation option, which is worth asking about at the outset.
Private Medical Insurance, answered
- Are pre-existing conditions covered? Generally not, at least at the start. Under a moratorium, a condition you have had in a recent period may become eligible after you go a stated time without symptoms, treatment or advice for it.
- What is a moratorium? An underwriting approach where you are not asked for a full medical history up front. Instead, recent conditions are excluded, sometimes permanently, sometimes until you have been clear of them for a set period.
- Does it replace the NHS? No. Accident and emergency, and most chronic long-term condition management, remain with the NHS. Private medical insurance is aimed at prompt diagnosis and treatment of new, curable conditions.
- Can I add my family? Yes. Most insurers offer family cover, and children are often relatively inexpensive to add to an adult policy.
- Will the premium go up? Almost certainly, at each renewal. Age, medical inflation and claims all push it up. That is why we review it rather than setting it and forgetting it.
- Can my company pay for it? Yes, if you are a director or an employee of a limited company. The premium is normally an allowable business expense, but unlike relevant life cover the policy counts as a benefit in kind, so you pay income tax on its value personally and the company pays Class 1A National Insurance on top of the premium. Whether that leaves you better off than paying personally depends on your circumstances, and is a question for your accountant. See the section above for what it means in practice.
Excess, hospital list and outpatient cover. Between them they set most of what you pay.
Switching insurer can restart exclusions, so a review at renewal is not the same thing as moving. We will tell you which makes sense.
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Ask us about private medical insurance
Tell us where you are up to and an adviser will come back to you. The answers below just save us a phone call working it out.
- One of the five advisers on Eastfield Road, not a call centre.
- Usually the same working day.
- No obligation, and nothing to sign at the end of it.
Would rather talk now? Call 01733 602 033.
Tired of waiting lists?
Tell us what you want it to cover and we will show you what that actually costs.