Why Consider Private Medical Insurance (PMI)?
The National Health Service (NHS) provides excellent care, but waiting lists remain a challenge across many specialties. Private Medical Insurance (PMI) offers an alternative: faster access to treatment, choice of specialist, and private hospital accommodation.
However, PMI is not a substitute for the NHS. It is designed to cover acute conditions that respond to short-term treatment — not chronic conditions like diabetes, asthma, or ongoing mental health care.
What PMI Typically Covers
Most UK PMI policies include:
- Inpatient treatment — Surgery and hospital stays
- Outpatient treatment — Consultations, diagnostic tests (scans, MRI, blood work)
- Cancer cover — Often with full coverage for drugs and therapies, though limits vary
- Physiotherapy — Usually with a set number of sessions per year
- Mental health — Some policies now include psychiatric treatment, often with limits
What PMI Does NOT Typically Cover
- Emergency care — Always use NHS A&E for emergencies
- GP services — You still need an NHS GP for referrals
- Chronic conditions — Diabetes, asthma, epilepsy, high blood pressure (ongoing management remains with the NHS)
- Pre-existing conditions — Most policies exclude any condition you had symptoms of or received treatment for within the last 5 years (though some “moratorium” policies may cover them after a symptom-free period)
- Maternity — Usually excluded or requires a separate policy with a waiting period
- Cosmetic surgery — Excluded unless medically necessary
- Experimental or unproven treatments
How the FCA’s Consumer Duty Affects PMI
The Consumer Duty applies to private medical insurance just as it does to home and motor insurance. This means:
- Insurers must ensure their policies offer fair value relative to the price
- Policy documents must be clear, fair, and not misleading — no hidden exclusions buried in small print
- Claims handling must be accessible and timely, with no unreasonable barriers
- Renewal pricing must not discriminate against existing customers (following the 2022 pricing reforms)
Moratorium vs. Full Medical Underwriting
When applying for PMI, you will typically choose between two underwriting approaches:
Moratorium underwriting:
- You answer limited questions at application
- Pre-existing conditions are automatically excluded for an initial period (usually 2 years)
- If you go symptom-free and treatment-free for that period, the condition may become covered
- Faster to set up, but you need to track symptom-free periods
Full medical underwriting:
- You disclose your complete medical history upfront
- The insurer decides which pre-existing conditions to exclude permanently
- No uncertainty about what is covered
- Takes longer to set up but provides clarity
Excesses and Cost Control
Like other insurance types, PMI policies include an excess — the amount you pay toward each claim (or per policy year, depending on the policy).
- Choosing a higher excess (e.g., £500 instead of £100) lowers your monthly premium
- Some policies offer a 6-week wait option — if the NHS can treat you within 6 weeks, you use the NHS; if not, you go private. This significantly reduces premiums
Premium Finance: Paying Monthly for PMI
If you choose to pay your PMI premium monthly rather than annually, you will be using premium finance. As with home insurance, the FCA has scrutinised this market and confirmed that:
- Monthly payments typically cost 8–11% more than paying annually
- Insurers must demonstrate that premium finance offers fair value
- There is no sector-wide cap on APRs, but individual firms may face action if their rates are excessive
Advice: If you can afford to pay annually, do so. If you must pay monthly, ask for the total cost of credit before agreeing.
Making a Claim: What to Expect
The claims process for PMI typically involves:
- Visit your NHS GP — You need a referral to a specialist
- Contact your insurer — Before booking any private treatment, get pre-authorisation
- Provide medical information — Your GP will share relevant records
- Receive approval — The insurer confirms what is covered and any applicable excess
Important: If you receive treatment without pre-authorisation, your insurer may refuse to pay. Always check first.
Final Advice: Read the Policy Wording Carefully
PMI policies vary significantly between providers. Two policies with similar monthly premiums can have vastly different coverage limits, exclusions, and claims processes.
Key questions to ask before buying:
- Are there annual or lifetime claim limits?
- Is cancer covered in full, or are there caps on drugs or therapies?
- Does the policy cover outpatient consultations and diagnostics, or only inpatient treatment?
- What is the excess — per claim or per year?
- Are there any “co-payment” clauses (where you pay a percentage of each claim)?
If you have a complex medical history or specific concerns, consider speaking to a specialist health insurance broker.
