TL;DR
In short
- PMI pays for eligible private treatment, within the limits and terms of your policy, and can complement the NHS.
- Exclusions vary by insurer, but PMI does not usually cover pre-existing conditions, ongoing treatment of chronic conditions, routine pregnancy and childbirth or emergency treatment.
- You can get PMI through your employer or buy it yourself directly from an insurer or through a broker, financial adviser, bank or building society.
- Premiums depend on factors such as your age, where you live, your medical history, the level of cover and the excess you choose, so compare quotes on a like-for-like basis.
- Critical illness cover is a different product: it usually pays a lump sum if you are diagnosed with a covered condition, while PMI pays for eligible private treatment.
Do you use the NHS but want faster access to private treatment? Whatever your answer, it is definitely worth finding out as much as you can about Private Medical Insurance.
What is PMI and why is it provided?
PMI, or private medical insurance, is a product offered by many companies on the UK market. In return for the premiums you pay, the insurer agrees to cover the cost of eligible private treatment, within the limits and terms of your policy. Private Medical Insurance can complement the services of the NHS by providing cover for the cost of prompt access to private treatment, and access to some drugs and services not always available on the NHS. If you don’t want to use the NHS, it can be very expensive to use private treatment without it – especially for serious conditions.
You can read more about PMI itself in the MoneyHelper article.
What does a PMI policy cover?
As with any insurance, the cover and premium depend on a variety of factors, including the insurer itself.
Cheaper variants of PMI cover the cost of in-patient treatments, for example operations and longer stays in the ward. If you plan to buy the extended insurance option, you will usually get access to outpatient consultations with specialists.
Exclusions vary by insurer and policy, but PMI does not usually cover:
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pre-existing conditions you had symptoms of, or advice or treatment for, before the policy started
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treatments related to a normal pregnancy and childbirth without complications
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aesthetic medicine treatments to improve your appearance
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treatment of injuries from some dangerous sports or activities, or from professional sport (exclusions vary by insurer)
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treatment of injuries arising from war or similar conditions
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ongoing treatment of chronic conditions such as diabetes, epilepsy or high blood pressure (some policies cover an acute flare-up)
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emergency treatment, such as a visit to A&E.
Some policies also exclude or limit cover for organ transplants, so check the policy terms.
Some policies cover mental health treatment only as an optional extra or within limits, and some exclude certain sports injuries (for example from professional or dangerous sports), so when choosing PMI for yourself, it is worth checking the scope of the policy carefully.
How can you get private medical insurance?
There are two ways to obtain PMI. The first is to get insurance through employee benefits. Some companies in the UK fund it completely, while others offer a subsidy. Since you’ve come across our blog, you’re probably planning to obtain insurance yourself. Where can you buy a policy?
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Directly from your insurer
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From a broker
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From a financial adviser
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At your bank
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At a building society
For private medical insurance (PMI), we can refer you to a partner firm, such as The Right Mortgage. Extend Finance does not advise on or arrange PMI policies. Our article on how to choose an insurance broker explains general points to consider.
Which insurers offer PMI?
Insurers offering private medical insurance to UK residents include:
Already having another product with an insurer, such as Aviva, does not mean that its PMI is the best fit for you. If you’re deciding on a policy to protect your health, it’s worth going to a broker for advice, as they can help you compare policies.
Is PMI the same as critical illness insurance?
Some people may wonder whether Private Medical Insurance is the same as critical illness cover. While both products are concerned with health, they are different products that can complement each other rather than substitutes. Critical illness cover usually pays a tax-free lump sum if you are diagnosed with a condition covered by the policy, and you can use the money as you choose, whereas PMI mainly pays the costs of eligible private medical treatment.
How much does private health insurance cost?
There is no single price for PMI. Premiums depend on factors such as your age, where you live, your medical history, the level of cover, the excess you choose and the hospital list, so it is worth comparing quotes on a like-for-like basis.
What affects the price of medical insurance?
It is useful to know what affects the cost of a policy. Insurers pay attention to:
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Your age - the lower it is, the more favourable the premium for you
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Where you live - premiums can vary depending on your location
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Smoking - if you are addicted to cigarettes, the insurer will claim a higher amount
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Your medical history
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Your claims history
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The way you pay your premiums - you can make transfers monthly or annually.
Insurers use these factors to set your premium and the terms of your policy.
How is employer-paid PMI taxed?
We have already mentioned that private health insurance is often offered as part of employee benefits. If you are a business and plan to buy PMI for your employees, note that medical insurance an employer pays for is usually a taxable benefit in kind for the employee. It is reported to HMRC on form P11D, and the employer usually pays Class 1A National Insurance on it (see the guidance on GOV.UK). Take accounting and tax advice on your own business’s position.
We hope you found our article helpful. We encourage you to read our other articles, e.g. how to choose an insurance broker.
FAQ
Frequently asked questions
What is PMI and why is it provided?
PMI, or private medical insurance, is a product offered by many companies on the UK market. In return for your premiums, the insurer agrees to cover the cost of eligible private treatment, within the limits and terms of your policy. It can complement the NHS by providing prompt access to private treatment.
What does a PMI policy cover?
Cheaper policies cover in-patient treatment, such as operations and longer hospital stays, and extended cover usually adds outpatient consultations with specialists. Exclusions vary by insurer and policy, but PMI does not usually cover pre-existing conditions, ongoing treatment of chronic conditions, routine pregnancy and childbirth, cosmetic treatment or emergency treatment.
How can you get private medical insurance?
You can get PMI through your employer as an employee benefit, or buy it yourself. Policies are available directly from insurers and through brokers, financial advisers, banks and building societies.
Which insurers offer PMI?
Insurers offering private medical insurance to UK residents include BUPA, AXA Health, Aviva, The Exeter, Vitality, Freedom Health Insurance, National Friendly and WPA.
Is PMI the same as critical illness insurance?
No. They are different products that can complement each other. Critical illness cover usually pays a tax-free lump sum if you are diagnosed with a condition covered by the policy, whereas PMI mainly pays the costs of eligible private medical treatment.
