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Do you need health insurance?

By Dean Sobers

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Do you need health insurance?

Health insurance isn't the only financial product designed to support you during illness. Compare personal health cover with three alternatives.

Should I buy health insurance?

Health insurance is not without its merits. It fast-tracks consultations and covers private treatment for short-term medical issues.

However, there are many exclusions; you usually won't be covered for long-term treatment such as kidney dialysis, or illnesses such as asthma and normal pregnancy, non-essential cosmetic treatments and any pre-existing medical conditions you may have.

It's worth considering the alternatives, below, before making a decision

What are the alternatives to health insurance (apart from the NHS)?

Health insurance from your employer

This is more of an alternative way to pay for health insurance, but many employers offer it as a perk of the job, and it's usually much cheaper than it would be if you paid yourself.

Employer health insurance schemes are often more generous - for example, they may cover pre-existing conditions. And most insurers allow you to switch to a personal policy without losing your extras.

Healthcare cashplans

Healthcare cashplans are generally much cheaper than private health insurance - but are only designed to cover everyday health expenses such as dental work, specs, contact lenses, and physiotherapy. Their cover is unlikely to extend towards the costs of serious medical treatment - such as an operation. 

You pay a monthly premium, and the cashplan provider will reimburse you for medical expenses covered in the plan. There's an annual limit on how much you can claim, with more comprehensive policies having higher limits. 

Critical illness cover

Critical illness cover is often sold with life insurance, and pays out a cash lump sum if you're diagnosed with one of a number of listed critical illnesses, including some types of cancer, a heart attack or stroke, multiple sclerosis or the loss of limbs.

A critical illness policy can be used to pay for anything - and so might include medical treatment costs, adaptations for your home (such as mobility aids, special equipment or structural changes required due to a disability), or to pay off your mortgage. The one thing it doesn't do is provide a regular income, which income protection does.

The illnesses covered vary between insurers, so get advice before buying a policy and check the policy document. Pre-existing conditions tend to be excluded, but some insurers will base cover on your medical history

  • Last updated: August 2016
  • Updated by: Dean Sobers

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