How Does Private Health Insurance Work?

How Do Private Medical Insurance Premiums Work?

Premiums are the regular payments that you make to your insurer in order to maintain your policy. Usually these are paid on a set day each month.

How Are My Health Insurance Premiums Calculated?

The cost of a health insurance policy depends on a range of factors. For the most part, your personal situation will have the biggest effect on the cost of your premiums. When you apply for a policy, your insurer will ask you for the following information:

• Age
  The older we are, the more likely we are to need medical treatment and so the more a policy costs.
• Smoker Status
  If you’re a smoker, you’re more likely to become ill, and with a serious illness such as cancer, which means you’ll pay more for cover.
• Location
  Where you’re based in the UK will impact your policy; if you live near expensive hospitals, such as in Central London, you’ll pay more for your cover.

You’ll also have a range of policy options to choose from that will change the way in which your Health Insurance premiums work:

• Hospital lists
  The list of hospitals you are eligible to use will affect the cost of your Health Insurance, with more expensive hospitals meaning higher premiums.
• Outpatient cover
  Outpatient cover involves any treatment where you don’t need a bed. You have the option for full outpatient cover, outpatient cover up to a set limit or no outpatient cover at all.
• 6 Week NHS Wait 
  Some providers will offer this option, which means that they will only pay for treatment if the waiting list on the NHS for that treatment is longer than 6 weeks, thus lowering the likelihood of you claiming and the cost of cover accordingly. (Due to the current length of NHS waiting times, some insurers such as AXA aren’t offering this option. The market changes regularly, so if you’re unsure, give us a call on 02074425880 or email help@drewberry.co.uk to find out your options.)
• Excess 
  How much you’re willing to pay upfront for your treatment before the insurance policy takes over, e.g. the first £100 towards your care.
• Additional extras
  Optional extras on your policy, such as dental and optical cover, will increase the cost of your premiums.

Will My Private Medical Insurance Premiums Change?

It is very likely that over time the cost of your private medical insurance premiums will change.

This is because at the end of every year, your policy is renewed and your premiums will be changed to fit your new circumstances as well as your insurer’s new circumstances.

Some of the main reasons why you may see your Health Insurance premiums increase are as follows:

• Medical inflation
• Your increased age
• Your increased risk of claiming for expensive treatments
• Potential increase in Insurance Premium Tax (IPT)
• You have recently claimed on your policy.

How Does Health Insurance Underwriting Work?

The underwriting of your policy determines the conditions you will be covered for.

There are different types of underwriting that can make a significant difference the conditions you are covered for.

Full Medical Underwriting

FMU is the most basic type of underwriting as well as usually the cheapest.

When you’re fully medically underwritten, you provide your medical information to the insurer before your policy has been put in place.

The insurer will use this information to look at your medical history and decide whether or not they’re willing to cover any pre-existing medical conditions.

Pre-existing conditions that insurers are not willing to cover will be added to your policy’s list of exclusions and you will not be able to claim for them.

This will typically apply for the entire term of your policy, but some insurers may be willing to negotiate having conditions taken off your exclusions if you have had the policy for a while and not claimed for them.

Moratorium Underwriting

Moratorium Underwriting is more complex and usually more expensive compared to FMU.

Rather than giving your medical history at the start of your policy, insurers will look at it when you make a claim.

There are typically two types of Moratorium underwriting that will determine whether or not you will be able to claim for a condition when the time comes.

Rolling Moratorium involves all conditions that you have suffered from in the past 5 years being automatically excluded. But they will be taken off of your list of exclusions if you have served 2 years on your PMI policy without receiving any advice, medication or treatment for the condition.

Fixed Moratorium is the more lenient option but is no longer offered by many insurers. While all of your conditions in the last 5 years will still be excluded, your insurer will consider adding the condition after 2 years with the policy, regardless of whether you have received treatment for it.

How Do Private Health Insurance Claims Work?

One of the most confusing areas for people who don’t know how Private Health Insurance works is how people make a claim or what happens when they claim.

How Do I Make a Claim?

• Step 1
  In most cases, your treatment will start with a referral from your GP. Some Health Insurance policies have options to skip GP referrals for cancer or musculoskeletal symptoms, but the majority of cases will require an open GP referral from an NHS GP.
• Step 2
  Contact your insurer to make a claim. When you first take out your policy, you’ll receive the contact information of their claims team.
• Step 3
  Give your insurer your policy number (which can be found on your policy) as well as the information they require about your condition and your referral from your GP.
• Step 4
  If your claim is approved, your insurer will either recommend a specialist to you or you can use your referral to find an approved specialist yourself.
• Step 5
  Your insurer may provide you with some form of proof that your claim has been accepted (e.g. a letter or a code) that you should take with you when you go for treatment.
• Step 6
  Book the necessary appointments and undergo your treatment.
• Step 7
  After your treatment, the bill will go to your insurer to either be paid in full by them or to have their share of the costs paid for, minus any excess you must pay.

Exclusions

Exclusions are conditions that you are not able to claim for.

Most Medical Insurance providers have their own standard exclusions that they place on their policies which you will find in your policy terms and conditions. Common exclusions that you will find on UK PMI policies include the following:

• Fertility Treatment (IVF)
• Cosmetic surgery
• Conditions relating to normal pregnancy/childbirth
• Emergency care
• Kidney dialysis.

In addition to these exclusions, your insurer may add any pre-existing conditions you may have suffered to your policy’s exclusions during the underwriting process.

How Do You Apply For Private Medical Insurance?

Finding the Best Private Medical Insurance policy involves a lot of comparing and shopping around.

Below is the general process you need to undertake to ensure you get the best policy and premiums for your circumstances.

• Step 1
  Find out what you want from your policy and what you can afford.
• Step 2
  Compare Private Health Insurance providers to see what they offer.
• Step 3
  Collect and compare online health insurance quotes from UK’s leading providers to find out what they will cover and how much it will cost.
• Step 4
  After choosing your provider and policy, complete an application over the phone, online, or in person.
• Step 5
  Once your application is approved, you will receive the details of your policy and you can start paying premiums.

Buying Health Insurance is a process that shouldn’t be rushed and can often be confusing with all the options.

Rather than tackling the task alone, if you need some help just pop us a call on 02074425880 or email help@drewberry.co.uk.

Nadeem Farid
Head of Employee Benefits at Drewberry

Get Advice Comparing Private Health Insurance

Private Health Insurance can be a complicated policy to purchase because there are so many different options available.

If it is all getting a little confusing and you need some help then please don’t hesitate to turn to us for some Private Health Insurance advice.

Why Speak to Us…

We started Drewberry™ because we were tired of being treated like a number.

We all deserve a first class service when it comes to issues as important as protecting our health. Below are just a few reasons why it makes sense to talk to us.

• There is no fee for our service
• We are an award winning 🏆 independent insurance broker who works with all the leading UK insurers
• You’ll speak to a dedicated expert from start to finish
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• Claims support when you need it most.
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• Claims support when you need it most.