Jargon Buster | FAQs | Tips for buying PMI


Top Tips for buying Private Medical Insurance


•    What is important to you?

•    Seek advice

•    Check the underwriting

•    High No Claims Discount

•    Think long term


What is important to you?

The first question when buying Private Medical Insurance (PMI) should be “what is important to you?” Are you looking for the reassurance that you are covered in full or are you looking for ‘disaster’ type cover for major hospital bills.

The majority of PMI policies will provide you with full cover for In-Patient and Day-Patient treatment, e.g. where you have to stay in hospital for the day or overnight. One of the main differences between policies is usually the amount of out-patient cover they provide for things like specialist consultations and diagnostic tests (blood tests and x-rays). You can usually choose to have this covered in full, a specific annual limit or remove the benefit all together.

You may also have the option of including an excess on the policy. Although a higher excess will reduce the premium, when it comes to claiming, would a higher excess mean that you are unable claim?  Some provider’s excesses are per claim, others are per policy year.  Make sure you are comparing like for like when looking at insurers’ policies.


Seek advice

Buying PMI, be it for the first time, or if you are looking to switch to a new provider, can be a bit of a minefield. It’s worth seeking expert advice, be careful with companies who only offer a non-advised service as they can’t give you advice, they can only give you the facts and let you pick for yourself.

Here at Jelf we can provide you with the experience, expertise and advice you need and we will make a recommendation based on your demands and needs. It doesn’t just stop when you have taken out a policy, we are on hand to help and support you throughout the lifetime of your policy.  We can guide you through any claims experiences, queries and review your policy before each renewal in order to make sure that it is still right for you. Best of all there is no cost for us to review and provide you with a quote and no obligation to you for using our services.


Check the underwriting

PMI quotations can vary in price, some seeming to be a lot lower than others, for what appears to be the same level of cover. Generally, quotations you obtain online either direct from the provider or from comparison sites will be on a newly underwritten basis, meaning they may not cover you for pre-existing conditions. This makes you much less of a risk to a provider as you can only claim for new conditions, making the premium cheaper. It is very important to take this into consideration if you have an existing policy in place or you are leaving your employer's scheme as it may be more appropriate for you to look at a continuation of underwriting option. A continuation option can be more expensive but could protect cover for pre-existing conditions.


High No Claims Discount

Most individual policies include a mandatory No Claims Discount (NCD).  This can make the initial premium seem quite appealing but it is important to look at the starting levels offered by companies, how big the NCD scale is and how many levels you are likely to drop if claims are made. 

For example if an insurer is offering you a No Claims Discount of 50% you need to be aware that if you start claiming on the policy then the premium can double. This is even before any increase to the premium due to medical inflation (which in our experience, runs at a much higher level than normal inflation). Large savings in the beginning can often result in larger premiums in the long run.

Some insurers have a ‘per person’ No Claims Discount, others are ‘per policy’ so you might have four people insured on the policy, and claims from just one person could cause you all to drop down on the scale.

Try to calculate what the base premium would be and take this into consideration when making your decision.

For example – Monthly premium of £150 with a 35% No Claims Discount means you are only paying 65% of the true cost of the policy, the true cost can be worked out with the following calculation:

100 – The NCD percentage  
100-35 = 65

Divide the premium by the above answer and multiply by 100
£150÷65×100 = £230.76 per month


Think long term

When taking out a policy you will need to bear in mind what cover you may need in the future.  It may be tempting to opt for a lower level of cover now to keep the cost as low as possible, however in the future your needs may differ and it can be hard to upgrade without being re-underwritten.

Once you have had treatment or seen a specialist it may be difficult to switch provider without exclusions being applied.  Make sure you are happy with the policy before you sign on the dotted line.