What is it?

Private medical insurance is designed to cover treatment for curable, short-term illness or injury.

According to the Association of British Insurers (ABI): “Most people buy this type of insurance to gain the reassurance of knowing that treatment is available promptly, if they become ill or are injured.

"As a private patient you can often choose when treatment will take place, the specialist who treats you and the hospital. You will usually have the privacy of an en-suite room complete with TV and other home comforts.”

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However, the insurance is not designed to replace all services offered by the NHS – some illnesses and treatments will not be covered.

This usually includes pre-existing medical conditions, GP services, cover for a long-term illness that cannot be cured and accident and emergency admission.

It also includes treatment for self-inflicted injuries, HIV/AIDS, infertility, normal pregnancy, cosmetic surgery, sex change, and injuries arising from dangerous hobbies.

What type of cover do I need?

There is a large variety of schemes available – from cheap schemes offering limited cover, to expensive ones that offer wide-ranging cover and benefits.

Whilst most policies will offer cover as an in-patient (when you stay in overnight) and a day-patient (when you are in for the day only), some will not offer cover for out-patients.

Out-patient treatment usually includes consultation with specialist, diagnostic tests, radiotherapy / chemotherapy, physiotherapy and psychiatry.

Some will not offer overseas cover either. Think carefully about what you want from your policy and ask the insurer lots of questions – or read your documentation carefully – before signing up.

How will I be assessed?

There are two methods that insurance companies use to accept your application – “medical history declaration” or “moratorium”.

Medical history declaration (otherwise known as full medical underwriting) is when you are asked to provide full details of your medical history.

If necessary, the insurer may write to your doctor for more information. Be sure to give all the information you are asked for - if you do not, you may not be eligible for a future payout.

Moratorium is when you are asked to just fill in a form, and not give details of your medical history. The insurer does not cover any medical condition which existed in the last (usually) five years.

How much will I pay?

This depends on mainly on how comprehensive your policy is, and also your age. As people get older they are more likely to need medical treatment, which means that premiums will usually increase to reflect this.

“For example, someone aged 45 would pay 25 per cent more than someone aged 35. And a 65 year old would pay more than twice the premium of a 45 year old.”

A 23-year old female non-smoker can obtain full comprehensive cover from about £30 per month – but a 53-year old male smoker looking to obtain the same level of cover could easily be looking to pay £170 per month, according to quotes provided by comparison service Moneysupermarket.com.

Where do I buy insurance from?

You can buy your insurance direct from the insurer, or through an independent adviser or broker, or through one of the insurer's agents (these can include banks or shops).

Comparison websites such as Moneysupermarket.com allows you to compare policies across a range of providers – but be careful not to just choose the cheapest deal as this may offer relatively little cover. For even a few pounds extra, you may be able to obtain a far more comprehensive and useful policy.

How do I make a claim?

Apart from emergency admissions to NHS hospitals, all medical treatment has to start with a referral by your GP to an appropriate specialist.

The ABI says: “Before you receive any treatment privately, you should call your insurance company to check that you are covered for the treatment that you will receive. Your insurer will give you all the guidance you need, confirm what your cover includes and, if necessary, send you a claim form.

“Stay in contact with your insurer who will confirm whether any treatment you plan to receive is within your cover.”

Five websites

Association of British Insurers

Private Healthcare UK

Patient UK

Moneysupermarket.com

Private Health Service

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