What to consider before buying health insurance

Taking out health insurance is a big financial commitment. However, private healthcare is an attractive option to some because it allows you increased choice, private hospitals, reduced waiting times and more personalised care compared to free NHS treatment. Private treatments can be costly if you don’t have insurance.

As with all types of insurance, the level of cover you get depends on the policy you take out. You don’t want to be left in the unfortunate scenario of finding out that the private healthcare you’ve been paying for doesn’t actually cover you for the treatment you need.

Thankfully, in this worst case scenario, even if you have private healthcare cover, you’ll still be eligible for NHS treatment. Choosing the right health insurance plan for you will save you money and hopefully give you a better healthcare experience when you need it.

Limiting your healthcare plan is a great way to reduce your medical insurance bill. If you’d be happy to restrict your treatment to one or two local hospitals, you could save money. Some insurers offer a stripped-down hospital list in exchange for a cheaper premium.

Although being able to manage how you are treated is a clear advantage of a private healthcare plan, if you’re willing to relinquish some control you could save money.

If you’d be willing to let your insurer choose your consultant or give you a small number of consultants to choose from, some insurers will lower your premium. Such policies are known as ‘directional care’ or ‘guided option’ plans. With these, you usually need to first ask your GP for an open referral, where they don’t specify a named consultant for you to see. Then your insurer will find you an appropriate specialist for your treatment.

If you have an eventful medical history, using a broker might be worthwhile. This is because there are some conditions which are excluded by some insurers but not by others. Plans may not cover all definitions of treatments which vary from provider to provider and will usually be described within a Key Features document. It is important to check these meet your needs before entering into any insurance contract. Before taking out any policy, ensure you understand the implications for any pre-existing conditions you have, as these are normally not covered under the plan.

Thinking about what level of cover you need is important before deciding on a health insurance plan. If you want a comprehensive plan which covers initial consultations and diagnosis, be prepared to pay more.

Policies that require you to self-fund or go through the NHS for lower-cost items can be as much as 50% cheaper than full outpatient plans. Having a good think about the exact level of care you need before taking out a policy could save you money.

Although this relates more to travel insurance, it’s important to note that some policies have an annual health declaration for over 70’s. Make sure that you fill this in with up to date information, or your insurance might not pay out.

These types of plans typically have no cash in value at any time and cover are generally renewed on a 12-month basis. If premiums stop, then cover will lapse.

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