Workers' Guide to Private Health Insurance
Private health insurance has been an option for many years in the UK. Insurance companies run major advertising campaigns to promote the benefits of their products. It’s necessary to be cautious, though. Private health insurance provides a way to find prompt solutions to many medical problems; but it does not cover every aspect of health. Anyone thinking about private health insurance should therefore study exactly what’s on offer.
SubstituteFirst and foremost, private health insurance is not a substitute for the NHS. Private hospitals, for instance, rarely have casualty departments. In an emergency, the NHS is usually the only place to turn to for help.
PurposeIn the UK, private health care replaces NHS services other than emergencies. It enables people to obtain consultations, treatment and operations quickly and at convenient times. With private health insurance, it’s also possible to choose the best venue for such care.
Medical HistoryTo obtain private health insurance, an applicant must complete a questionnaire. Some insurers also insist on an initial health check.In addition, insurers may seek permission to speak to GPs. Insurers want to know medical histories and health conditions.
This aspect of private health insurance is vital to understand. If an applicant has an existing medical condition, he or she can still apply for insurance. But the insurer will almost certainly exclude treatment for that condition from the policy.Applicants with restricted policies must continue receiving NHS treatment for the excluded conditions. The alternative is to pay for private treatment of these conditions in full.
CostThe cost of private health insurance varies widely. Factors that decide the premiums include:
- The level of cover
- The amount of any excess
- The range of private hospitals the applicant may wish to attend
- Whether the policy is for an individual or family
Applicants should also seek quotes from a number of insurers. These quotes, as with any form of insurance, will differ.
No-Claims BenefitsMany private health insurers offer policies with no-claims benefits. If an insured person does not make a claim on his or her policy, the benefits build up. It’s therefore worth asking insurance companies what no-claims benefits they have.
Critical Illness CoverCritical illness cover is separate to standard private health insurance. Such cover gives the insured worker a tax-free sum in the event of a sudden severe illness. The money is available for virtually any purpose.
Income Protection InsuranceIncome protection is not an automatic feature of private health insurance. Some people, especially the self-employed, may wish to take out income protection insurance to cover periods of illness.
PerkSome workers receive private medical insurance as a perk. It’s even possible to negotiate for health insurance when applying for a job.
Workers must bear in mind, however, that HM Revenue and Customs (HMRC) taxes private health insurance as a company benefit. HMRC usually does this by reducing the Income Tax personal allowance by the value of the health insurance. Those who have private health insurance as a company perk can find the details of the adjustments in their PAYE Coding Notices.