Five things you might not know about health insurance

A doctor holding a stethoscope
The doctor will see you now...
"If you've already got a dodgy knee and are considering taking out insurance to jump a long queue, think again"
  • | by Emily Bater

If you find private medical insurance (PMI) or health insurance baffling, you certainly aren't alone.

According to a 2014 poll by Bupa, nearly half of 32-55 year-olds think private healthcare lacks transparency in the care it provides and the quality it offers. Over a quarter (27%) said that they would think about taking out private healthcare if it was more transparent.

That's why we're taking a look at a few things you may not know about PMI... and one thing you probably do.

1. You still need the NHS

PMI allows you to avoid sometimes lengthy NHS waiting lists and take advantage of quick consultations and treatments, but that doesn't mean you don't need the NHS.

The UK is one of the few places in the world lucky enough to have universal free healthcare and, even if you take out health insurance, you'll still need to take advantage of the NHS's services.

Private medical insurance doesn't cover accidents or emergencies, nor does it necessarily provide you with quicker service if you're suffering from a serious illness. You'll still need GP services and prescriptions too.

2. You may already have cover

Taking out private medical cover can offer a safety net so that if you ever need treatment or an operation you can get one quickly. But before you take out a policy it's worth checking whether you already have some form of cover.

Some employers offer private medical insurance as an optional perk or part of their employment package, so check to find out whether you're covered.

These can be more generous than individual schemes and may offer higher levels of cover for a lower cost.

3. It can offer more (or less) than you think

Health insurance may provide you with more cover than you realise – for example, your policy may include private dental care and it may offer cover for some procedures not covered by the NHS.

Taking out PMI can also mean access to additional services, such as full health checks and gym membership at a reduced price.

While some more generous polices may provide treatment for pre-existing conditions, most standard policies don't. So, if you've already got a dodgy knee and are considering taking out insurance to jump a long queue, think again.

Similarly, PMI usually doesn't cover incurable or chronic illnesses such as asthma or diabetes.

All policies are different, so if you're considering taking one out look at the terms and conditions to find out what it excludes beforehand.

4. You may not be able to choose where you're treated

When taking out a private medical insurance policy, you'll be asked to choose several hospitals where you'd be happy to be treated.

You won't be able to pick just anywhere, and when it comes to having treatment you should be aware that you may not be able to go to the hospital of your choice, depending on availability.

Private medical care doesn't necessarily mean you'll be treated in a private hospital. NHS hospitals contain private units, or you may receive private treatment on an NHS ward.

5. You may have to pay extra on top of your cover

If you want the choice of being treated in several different places or with a certain expert, an insurer may ask you to pay more on top of your monthly or annual fees.

Insurers set a maximum amount for what they're willing to pay for a certain treatment and, if where you decide to be treated (or by whom) exceeds those fees, you may have to top up the amount.

And one thing you probably do know…

It's not essential... but it can be valuable

Think about where you are financially before considering private medical insurance. Pay off any expensive debt, such as credit cards or loans, before considering making another financial commitment.

If you have dependants you may want to take out life insurance first and protect your income in the event you can't work. You could also look into sorting out a pension if you haven't already.

Having said all that, taking out PMI can be a good way to ensure that you and your family have the right treatment when it's needed most.

What's more, it may prove even more valuable in the years to come as the NHS comes under increasing stress... just make sure you search for the right policy and check those T&Cs with care.