Private medical insurance (PMI), or private healthcare as it's sometimes called, is designed to cover the costs of private medical treatment for what are commonly known as acute conditions.
Most private medical insurers define an acute condition as a disease, illness or injury that is likely to respond quickly to treatment, allowing you to return to a fit state of health.
They may also be able to cover you up to the point of diagnosis for other conditions not covered by the policy.
Most people buy private medical insurance to gain the reassurance of knowing that treatment is available promptly. As a private medical patient you can often choose when treatment will take place, the specialist who will provide it and the hospital where you'll be treated. However, private medical insurance doesn't come cheap and some people regard it as a luxury, not a necessity.
It's important to remember that private medical insurance isn't designed to replace all the services offered by the NHS. Some, such as accident and emergency, are beyond the scope of most private hospitals. The NHS also provides comprehensive medical treatment for everyone, regardless of their ability to pay.
If you're concerned about the risk of not being able to work and the associated loss of income, then it's worth considering whether you have sufficient savings to cover private treatment should the need arise.
The general rule of thumb is that you should have six months' salary saved in an emergency fund. However, it's worth bearing in mind that while you can 'pay as you go' for private medical treatment, it's likely to be very expensive. For instance, a hip replacement could set you back around £10,000. Will your savings cover it? If you're concerned about the potential loss of income by being unable to work, then it's worth considering income protection insurance, too.
If you are mostly concerned about having medical insurance to cover any illness, accidents or injuries while travelling abroad, then it's worth looking at your travel insurance needs first.
There are a large variety of private medical insurance schemes, from low-cost private medical schemes that offer limited cover, to those that offer a wide range of cover. To decide which private medical insurance scheme is right for you, there are a couple of key questions to ask yourself:
It is worth checking to see if the cost of private medical insurance can be reduced by:
If you are interested in taking out a private medical insurance policy, make sure you choose the right level of cover at the right price.
Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.
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