Is health insurance something you should consider?

Published on January 11, 2021 by Blackstone

As the NHS continues to battle the challenges of Covid-19, you may be considering taking out health insurance. The pandemic means many people are facing delays and unable to book appointments when they want to speak to a health professional due to backlogs and restrictions.

Taking out private health insurance could provide you with an alternative and give peace of mind that, should you need to see a nurse, doctor or specialist, you will be able to do so. However, it should be noted that at times of considerable strain on the NHS, like at the start of the Pandemic, private hospitals could be used to fill the gap and some no urgent elective treatments could be postponed or cancelled. Before you move forward with taking out a policy, it’s important to know what’s covered and whether it’s appropriate for you.

Number of people taking out health insurance has fallen

According to the Association of British Insurers (ABI), the number of people taking out health insurance has fallen in recent years.

Around 1.2 million people are covered by personal health insurance. In the four years between 2015 and 2019, the figure has fallen by around 10%. A further 3.5 million people are also covered by corporate health insurance, a fall of 5% in the same period.  The fall has been linked to a tax that means insurance premiums are higher, but there are many reasons why people decide to reduce or cannel their cover. You should weigh up if it’s right for you.

How does health insurance work?

Health insurance works in a similar way to other insurance products. You will pay regular premiums for your cover and if you’re ill or injured during the policy’s term, it will pay for medical treatment, tests, and surgery.

In the UK, health insurance is designed to work alongside the NHS. You may still make appointments with your GP through the NHS while seeing a specialist privately. The key benefits of taking out health insurance are:

• Receiving treatments sooner
• More choice in where you receive treatment
• A private room if you are an inpatient
• A wider range of drugs and treatments that may not be available on the NHS

There is a range of health insurance policies available. Some are more comprehensive, for instance, including physiotherapy, dental treatment, or optical appointments, than others. You can also choose a policy that covers your partner and children if you wish.  

Each policy will have exclusions too. You should read the small print before you proceed to understand what isn’t covered. Most private health insurance policies do not cover:

• Chronic illnesses
• Elective treatments, such as cosmetic surgery or fertility treatments
• Emergency treatment
• Care and treatment during pregnancy

There will also be a limit on how much you can claim. Again, this will vary by policy and the way it is calculated differs too. Some providers will set a total amount that can be claimed, while others will set a maximum per condition, for example.

Do you need private health insurance? The good news is the NHS is available, so it’s a personal choice. If you want the peace of mind of being able to book appointments quickly or prefer more choice when receiving treatments, health insurance can make sense.

What to consider when taking out health insurance

If you decide to take out health insurance, there are some things to consider to help you pick the right policy and level of cover for you.

1. Do you have any existing policies? It’s a good idea to review any existing policies you might have so you’re not covered twice and that any new policies complement those already in place. You may have cover that you’re not fully aware of. For example, your employer may offer corporate health insurance and some premium bank accounts include some cover too, so take some time to review your circumstances first.
2. Who do you want to cover? Decide who you want your policy to cover, this can be just you or include your partner and children too. If you want to cover multiple people, choosing a joint or family policy will typically save you money rather than taking out a policy for each individual.
3. What do you want the policy to cover? The more comprehensive the policy, the more the premiums will be. Setting out what you want the policy to cover first can help you compare different options. Some policies, for instance, will cover mental health and sports injuries, while others may not. Always check what will be excluded too.
4. What will the premiums be? The cost of the policy will depend on the level of cover you want, as well as your lifestyle and health. Premiums will vary between different providers, so you should compare different options.
5. Would other protection policies add value too? While talking out health insurance, it’s worth reviewing other insurance products too. Critical illness cover, for example, can provide you with a lump sum following the diagnosis of certain critical illnesses, providing you with financial peace of mind. You may also want to consider Income Protection and Life Insurance policies.

Please get in touch if you’d like to discuss how health insurance and other protection policies can fit into your financial plan.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.