Millions of us have health insurance policies in place but before we take out our policy and begin paying premiums, do we research the subject fully? It would appear that many do not as later on they can find that they are not covered as fully as they thought they were or they have the wrong type of policy in place.
Here we will take a look at things that you should consider before taking out any type of health insurance policy. Sometimes referred to as private medical insurance, health insurance basically kicks in and pays out for medical treatment should you become sick.
The thing to look out for is the different types of policies available and to realise that all health insurance doesn’t cover you for everything. Most often, the policy will pay for essential medical treatment i.e. acute conditions that can be treated easily, along with surgery and certain types of medical tests.
What does your health insurance include for?
This will vary dependent upon your insurance company and the different elements that they build in. Here are some of the most common ones:
- Inpatient treatment- being admitted into hospital overnight or as a day patient for treatment, surgery and tests
- Outpatient treatment – this is where you see a consultant but are not admitted. The amounts that you can claim for this may vary and some policies differentiate between varying types of out-patient services
- Hospital accommodation – this covers your time spent in hospital and all nursing care
- Medication – some but not all policies will include for drugs available and not usually available under the NHS system but they will usually have to have been approved by the NIHCE (National Institute for Health and Care Excellence)
- Psychiatric cover – if you are looking for psychiatric treatment to be included, this may be complex as some insurers will cover curable complaints but not ones that demand long-term care. If you take out a comprehensive policy it may or may not cover this so you will need to check.
When it comes to such things as complimentary or alternative therapy, nursing at home, private ambulance, advice line and accommodation for parents, usually only the comprehensive policies include them.
Check what isn’t included
If you are going to need treatment for long term conditions such as dialysis or asthma, the policy normally will not cover it. Cosmetic treatments, pregnancy and drug abuse are also most often excluded.
Look out for the different types of health insurance
Do you want a policy that is fully underwritten or a moratorium insurance?
Underwritten insurance needs you to provide a full medical history whereas with the moratorium plan, you only need give limited details. Usually underwritten policies provide fuller coverage but are pricier with the moratorium ones being cheaper with blanket exclusions for specific conditions that are pre-existing.
Also look out for policies that only cover you if NHS treatment would take more than six weeks to take place. Some will also be aimed at those over a certain age or focus on specific diseases. Mix and match policies are also popular as you begin with basic in-patient treatment and then you can add the things that you want to provide bespoke cover.
Is buying health insurance a good idea?
If you can afford health insurance or your place of work offers it as a perk, then it can be very helpful. You can often get treated faster and make use of private treatment for a range of medical issues which are considered short term.
Are there other options apart from health insurance policies?
Yes. If you do not want to take out any sort of cover then you can make use of the free treatment service provided by the NHS. There are also Cash Plans on offer where you pay a set fee each month and then claim back the cost if you need treatment. Critical illness cover policies only pay out if you suffer from a specific serious illness.
Let’s take a look at a few of the options:
Healthcare Cash Plan – often the cheaper option as they only cover routine health costs such as dental treatment, spectacles, contact lenses and physiotherapy. Operations and serious treatments will not fall within this plan. By paying a set monthly sum, these types of medical expenses will be covered with an annual limit specifying how much you can claim. The comprehensive policies tend to have higher set limits.
Critical illness cover – often running alongside life insurance, this pays out a lump sum if you suffer from a listed critical illness. The insurer will specify which illness are covered. Once you are diagnosed, the cash will be paid out to you and you can use it as you wish i.e. to pay for medical treatment, special equipment at home or to cover mortgage payments. It will not provide you with a regular form of income. The thing to watch out for here is that existing conditions are normally excluded. Some insurers will want a full medical history and then decide what cover they will offer and how much it will cost.
Income protection – you will pay a set amount to your insurer every month and if you become ill, you will receive a regular income until you are able to return to work, retire or die. Very often you have to wait a set time before you can claim i.e. a certain number of weeks. It will cover most forms of illness and some disabilities if they prevent you from working. While the policy is live, you are normally not limited to how many times you can claim. If you are the main breadwinner in the family and do not get sickness pay from your employer, you may wish to consider this.
If in doubt, it is always a good idea to discuss your needs with a professional insurance advisor. They will be able to look at your personal circumstances, what you can afford and point you in the right direction.