Brignall Archer

As a first port of call in the case of medical emergencies, residents of the UK always have access to the NHS. However, when travelling, many find to their detriment that no such provisions are available in other countries. It is not uncommon for travellers to fall victim to disease, and they may find themselves saddled with debilitating medical bills after receiving care at foreign hospitals. Therefore, medical insurance is an essential consideration for travellers.

It is a mistake to think that disregarding health insurance for holidays will save money. The risk of paying large amounts of money for unexpected illness treatment is too great, and could ruin an otherwise great holiday. The cost of holiday health insurance is generally quite small, since most people only travel for a week or two. Consider that in the US, if a traveller has to be repatriated to the UK, they may have to pay a huge £45,000 for travel by air ambulance. Compared to this, a few extra pounds for travel health insurance seems insignificant.

Insurance is especially important on holidays involving sports. Skiing, mountain climbing and biking, as well as any driving, carry a certain amount of risk, and will merit taking out insurance.

Health insurance is often thought of as an American way of looking after your health. After all, in the UK we have the NHS, an extremely large healthcare organisation that is free at point of entry and available for everyone to use. However, increasingly, people are making the choice to take out health insurance and have greater control over their, and their family’s health.

The NHS does an excellent job of providing free care for everyone that needs it, but there are certain limitations that make private healthcare desirable. Speed of treatment is a very important factor to consider – with an ageing population, increasing demands are placed on the NHS and waiting lists are inevitable. Health insurance helps to cut down on this, while at the same time placing the very best quality care at a patient’s disposal.

In the US, there is no choice but to have health insurance – in the case of not having insurance, medical bills can be huge and unmanageable. In the UK, there is a choice to be made. Most choose to rely on the NHS, but for those who require increased service and shorter waiting times, private healthcare is the way to go. Increasing numbers of people are now going down that route. Just as in the US, private healthcare becomes much more accessible with insurance.

In exchange for a long term, relatively modest investment, the worst medical emergencies can be covered without the fear of being given an unexpectedly large bill at the end. This helps to take the worry out of healthcare. Peace of mind and lowered stress levels are key benefits of health insurance.

What is Health Insurance?

Health insurance is the term given to insurance that will pay out if you become ill, so that you are able to pay for your medical expenses, e.g. for private healthcare.

What are the Benefits of Health Insurance?

Health insurance can allow the policyholder to seek private treatment quickly, avoiding lengthy NHS waiting lists.  Private hospitals are often perceived as being often more comfortable than NHS hospitals. 

Do I Need Health Insurance?

It is a good idea for everyone to have some form of health insurance.  It is especially important for those who are self-employed, anticipate poor health in the future, or those who would always choose private healthcare.

How Much Does it Cost?

Different policies offer different levels of cover, so premiums vary considerably.  For example, some policies may pay out more than others, and policies do not cover all types of illness.  Premiums will also depend on your age, general health, medical history, and other factors such as smoking and alcohol consumption.

Where Can I Obtain Health Insurance?

Some employers offer their employees health insurance either for free or at a discount rate.  Often in this situation, the employee will contribute a certain amount each month, and the employer will then ‘top it up’.  If your employer does not offer this benefit, it is possible to obtain health insurance directly.  There are many different companies that offer it, and it is best to speak to a health insurance company, who will be able to assess your needs and advise you on the best product for your needs.

When considering your options from the many insurance plans available it is best practice to spend some time researching the market and deciding which benefits you wish to include in your policy. The Financial Services Authority regulates the health insurance industry and detailed information is available to allow you to make an informed decision regarding the best policy for you.

As there are so many insurance companies vying for your custom and with some policies being quite complex and detailed, an overview of the most common types of insurance cover might be a useful place to start.

Private Medical Insurance

Private Medical Insurance generally provides for the cost of treatment for acute, short-term illnesses that have an outcome whereby the patient makes a full recovery and returns to their normal lifestyle. Cover normally includes in-patient assessments, nursing care, surgery, consultations and diagnostic tests. 

Critical Illness Insurance

Critical Illness Insurance provides cover for illnesses specified in your particular policy. If you should then suffer from one or other of them, you can claim financial assistance for treatment and associated healthcare provision. There will be a ceiling on these funds, which will be clearly stated in the policy.

Income Protection Insurance

Income Protection Insurance policies are not directly related to health care provision, but provide financial support, at a rate outlined in your policy, should you be unable to work as a result of illness or injury.

When it comes to insurance policies, many people have a lot of questions. For example, what is the difference between health insurance and life insurance? The simple answer is that there is a huge difference!

Health cover protects you from extensive medical expenses by covering all or part of the cost of certain medical procedures. Life insurance pays out the value of the policy to the beneficiary when the insured individual dies.

There are two main types of life insurance – whole and term. The latter is the cheaper solution simply because it is just life insurance. You can purchase it for as little as one year and up to 30 years, in some cases. In order for the beneficiary to collect on the policy, the insured must die during the term. Whole life insurance is a little more involved as it includes life insurance as well as an investment plan.

The price that you spend on a health insurance policy, as well as a life insurance plan, will be determined by your age and overall health. In general, younger individuals pay less than those who are older. Poor health also means higher charges.

Deciding between health insurance and life insurance shouldn’t be an issue, as the two are totally different and both are necessary. Some people obtain private health cover through their employers, but life insurance is more often bought by individuals.

If you have decided you want extra care for you and your family how do you filter through the various plans to find the best deal suited to you?

The main type of insurance offered is Private Medical Insurance (PMI) but you can also seek Dental Insurance, Travel Health Insurance and Critical Illness Insurance.  In addition to these four types of plans there are variants with different family, child and pensioner covers.

Over 7 million in the UK have turned to PMI which offers almost complete cover.  The main benefits include cutting out lengthy waits for operations and test results as well as private rooms in a wider range of hospitals.

The one off-putting element of PMI is the cost.  Cover can be all encompassing but it comes at a price with additional fees added due to existing conditions, damaging habits, age and long-term illnesses. You can limit these costs by being selective in your care plan.  Many leading companies offer Critical Illness Insurance specialising in cancer, stroke and heart conditions.  You can limit the range of hospitals available to you such as excluding the high expense London facilities.  Taking away some non-urgent perks such as physiotherapy and convalescent care as well as including an excess will also reduce your premiums.  Joint policies may be of benefit for you and your family and can bring a better deal. 

Be sure to find out exactly what the plan will give you and compare the various companies before committing yourself.

When looking for a health insurance provider, as with any insurance, the details must be examined very carefully.  It is wise to know what an insurance provider covers to ensure complete peace of mind should one fall ill.  Anyone considering taking out a health insurance policy should check the features listed below and be sure that the coverage is appropriate.

One of the common features of a health insurance policy is priority access, often to separate facilities.  Some insurance providers have their own facilities for clients, although it is also possible to get priority access to state facilities under the terms of some insurance.  Health insurance can often guarantee treatment from competent consultants and specialists in their field.  Some insurance providers recognise the need for simplicity when a client is unwell and guarantee straightforward and simplistic claim facilities for their clients in the event that they are unwell.  Some health insurers offer a cleanliness guarantee.  This is one aspect of healthcare that may elicit concerns for many individuals because of the diseases that may be contracted from a facility that is not sterile.

Another popular feature of health insurance is the ability to receive access to new drugs that an individual may not be able to access through state provision.  Eligibility for pharmaceuticals is often restricted under state provision on the basis of price or effectiveness, which is why this is a desirable feature of a healthcare insurance policy.  Many healthcare policies will also provide access to a round-the-clock helpline with nurses available to offer initial advice.

As with all types of insurance, healthcare insurance is there to help an individual deal with bad situations that cannot be avoided.  Healthcare insurance is obviously a little more personal and much more significant than some other forms of insurance, due to the potential impact that health problems can have on an individual’s life and their ability to continue working.  No one has a set plan or a timeframe to be ill, which means that insurance is there to help sick individuals cope with life whilst they are recovering.

The insurance will usually be tailored to an individual. As a result there may be important choices to make between the different types of health insurance.  For example, if an individual were concerned about particular conditions such as cancer or heart disease, two very serious conditions which are relatively prevalent, it may be possible to take out cover specifically for these conditions.  It may be the case that an individual has a family history of a disease, which may make the premiums higher, although the cost could be considered peace-of-mind should the worst happen.

A major concern about healthcare in the UK is the speed at which a patient may get to see a specialist.  Healthcare insurance will speed up this process and will allow faster access to health professionals in the event that the policyholder needs to be seen.  Hospital infection rates are another concern and it is possible to buy health insurance that will ensure completely private treatment in the event of serious illness.

Many factors influence the cost of health insurance.  The cost will depend on the type of health insurance plan that you choose and whether the policy covers only yourself or includes your family as well.  The more comprehensive the policy, the more it costs.  If you want to be treated in a top private hospital, the policy will be more expensive.

To keep down the costs of your private health insurance, you can sacrifice some level of coverage or benefits.  For example, you can agree to attend a smaller choice of hospitals or you could pay a larger excess on your claims.  Your insurance company may offer no-claims benefits, which will reduce the annual increase on your premium.

Another way of cutting costs is to take out a delayed treatment option.  This means that if you are advised to have treatment by your NHS specialist and you have to wait more than the time specified in your policy for that treatment at a NHS hospital, the private health insurance will pay for you to receive treatment privately so that you are treated quicker.

Many employers offer private health insurance as a perk to benefit both themselves and you.  This private health insurance can be taxed if you earn above a certain threshold.  When you retire, you will have to renegotiate the policy and there is no tax relief on private health insurance when you are over 60.

Health cash plans can cover a range of dental, optical and physiotherapy costs, as well as alternative treatments and complementary medicines.  They can also help with a number of other expenses that can crop up if you go into a hospital that is not covered by the NHS or private medical insurance.

Health cash plans pay cash sums when you go into the hospital, visit the dentist or optician, see a specialist, have a baby or need alternative therapies.  This money is to pay the costs of day-to-day expenses related with your health.

A health cash plan is intended to help you get medical treatment as soon as possible and often offer helplines and health screenings, as well as discounts for health clubs.  The plans also offer help towards any costs incurred by illness at home such as aftercare and home help.

Cash health plans can also include accidental death benefits, critical illness insurance and funeral benefits.

There are several advantages to having a health cash plan.  There is no need to have a medical before joining and they can help with the cost of dental and optical treatment.  Children are usually included for free when their parents take out a health cash plan.  The premiums for a health cash plan do not go up as you get older and they are not based on your age or gender, making them a good deal for older people.  Some plans however, do have an upper age limit for new joiners.