Fitness check for insurance
COST IS a vital consideration when deciding whether to take out — or continue with — private medical insurance. As prices continue to rise well above the rate of inflation, how can you save money while maintaining the comprehensive cover you need?
These price hikes are due to the twin pressures of an ageing population and expensive new treatments, coupled with the fact insurance premium tax has risen from six per cent to 10 per cent since November 2015 and will rise again, to 12 per cent, on June 1. These factors combined have led to an average annual increase in premiums of more than
£50 per person, according to the Association of British Insurers. This, in turn, has resulted in a reduction in the number of individuals paying for private medical insurance by one third since 1997.
But it is not all bad news: there are plenty of ways to reduce your PMI premium without compromising your benefits or losing cover for pre-existing conditions.
“So many people pay for optional extras on their plan that they simply don’t need,” says Mark Underwood from Switch Health. “An independent, specialist broker can access all PMI providers to find you the best cover for the best price.”
As well as saving you money, an expert broker will save you valuable time you would otherwise spend scouring the market for the best deal. And they will not charge for this.
Many people see private medical insurance as an unaffordable luxury and are happy to rely on the inconvenience and long waiting times provided by an ever-stretched NHS.
Unfortunately, the government seems intent on penalising the private healthcare sector, not appreciating the value it adds to the UK economy, as well as the support it provides to the NHS. A predicted further increase in insurance premium tax, to 20 per cent by 2020, is just one example, while lack of competition in the market allows some hospitals to charge astronomical fees.
It does not help that treatment costs vary greatly across the country. For example, an MRI scan can cost over £1,000 more in some hospitals than in others, while a hip replacement ranges from £8,000 to £16,000, depending on your location. These variations have led many insurers to introduce postcode banding to their PMI policies, with central London — perhaps predictably — the most expensive region. Customers who live in that area can find themselves being penalised on price, whether or not they need to use the most expensive hospitals.
In summary, the best way to avoid increasing premiums is to find a knowledgeable broker who will review your arrangements for you at no charge each year.
New regulations this month from the Financial Conduct Authority put insurers and intermediaries under an obligation to tell you there might be a better deal available — even if saving money requires shifting insurers. Appointing an expert broker means you will always be ahead of the market and in control of your costs.
Dan Parker is director of Switch Health, 01242 371300, switchhealth.co.uk