Choosing private medical insurance How to cut the cost of PMI

Health insurance

Make sure you disclose your full medical history

Insurers have devised innovative PMI schemes in recent years that help keep costs down.

No-claims discounts

Many PMI insurers offer no-claims discounts (NCDs) to help cut costs. If you don't claim or, in some cases, if the cost of your claim is less than your premium, you build up a discount. However, Which? thinks these no-claims discounts are questionable as they may put consumers off seeking vital treatment when needed just to preserve their discount.Some providers don't offer NCDs for this reason. 

PruHealth has an innovative 'Vitality' scheme, which allows policyholders to qualify for a discount on next year's premium by doing exercise, eating healthily and having annual check-ups. Aviva's 'My Health Counts' programme works in a similar way, encouraging members to input health information, such as height, weight and blood pressure. 

Excesses

Excesses for PMI policies work in a similar way to excesses on car or house insurance. If you need private treatment, you pay your chosen excess and the insurer foots the rest of the bill.

Check your policy document to find out exactly how your excess works, because definitions can vary considerably between policies. Broadly speaking, the higher the excess, the lower your premium will be. The maximum voluntary excess varies substantially between insurers but is typically £1,000 or less.

Health insurance

PMI will secure you a bed in a private room

There are specific high-excess plans such as WPA's XS Health, which have higher excesses. Effectively, you bear the cost of minor treatment with these schemes but are covered against the open-ended cost of serious illness.

Shared responsibility schemes

With these PMI policies, premiums can be kept down if you agree to pay a percentage of the cost of any treatments you have. The theory is that doing so gives you an incentive to keep costs down.

CS Healthcare and WPA both offer this option. Generally, the more you agree to pay, the lower your premium.

Delayed treatment

Another option for cutting costs is to use your private insurance only if the NHS can't treat you quickly. Some insurers, including AXA-PPP, Norwich Union and Tesco offer plans with a six-week wait option, whilst Saga and Universal Provident offer 4-week and 90-day options respectively.

This means that if you are told you have to wait for more than, say, six weeks for NHS treatment after your specialist says that you need it, your insurer will pay for you to be seen more quickly privately.

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