Renewable resources
THOUSANDS OF clients who deal directly with their medical insurer just allow the policy to renew year after year. They share the common misconception that if you are loyal to your insurer, they will be loyal to you. If you have just received your renewal invitation, you may still be recovering from the shock (an ailment not widely covered by medical insurance). This year we have seen some premiums increase by as much as 150 per cent, while the insurer sits quietly and hopes the client simply lets the renewal go through automatically.
In under two years, the government has increased insurance premium tax three times. Currently it stands at 12 per cent, with warnings of further rises to come. On top of age-related rises, medical inflation and claims loadings, the price of medical insurance goes up, year after year.
With so many deals available on the market and almost all of the insurers fighting for new clients (often including clients switching insurers with continued cover for pre-existing conditions), where are the concessions for those clients who just let their insurance renew at inflated premiums? The answer is — there is none, unless you ask the right questions, with the facts and figures to back up your argument.
In April, the FCA rolled out an initiative stipulating insurers and intermediaries alike must now include wording in their renewal letters to advise clients there might be a better deal elsewhere. This is especially true if you have been with the same insurer for more than four years.
We were approached recently by a JC reader for advice on their renewal — they had been quoted £6,800 for the year (a sadly inevitable increase from last year) and had been told there was no room for negotiation. They were surprised to find, after speaking to one of our specialist consultants, that had they been moving to their insurer from another provider, they would have been offered the cover at £3,946. Sir Francis Bacon once said: “knowledge itself is power” and with this new information and our help, they were able to substantially reduce the premium.
We use current offers on the market as ammunition to get the discounts available for our existing clients on their policies, without their needing to do any of the legwork. This free annual service means you can be certain you are consistently getting the best value for money and not just a special offer in the first year.
Niall Scott, the loyalty team leader at Switch Health, negotiates these discounts on a daily basis and says: “even the most competitive premiums usually have a little bit of wriggle room” when approached in the right way. “Unless you have a broker working on your behalf each year, it is likely that you are paying more than you need to.”
Most of us nowadays are familiar with price-comparison sites and this seems to work well for the more common insurance products but with something as complicated and specific to personal needs as private medical insurance, you need an expert to navigate the pitfalls and benefits, which are easily overlooked. Unfortunately, not everybody knows such a service exists and people often pay the penalty for being loyal to their insurer.
Dan Parker is director of Switch Health. If changing insurers, ask how this affects cover for pre-existing conditions