What Does Private Medical Insurance Actually Cover? A Straightforward UK Guide

First, what is Private Medical Insurance designed to cover?

Private Medical Insurance, commonly shortened to PMI, is designed primarily to pay for eligible private treatment for acute medical conditions.

An acute condition is broadly an illness or injury that can be treated with the aim of curing it or substantially improving it. PMI is generally not designed to fund the ongoing management of long-term chronic conditions indefinitely.

That distinction is important.

If you injure your knee and need investigations followed by surgery, that may potentially fall within the type of treatment PMI is designed to cover.

If you have a long-term condition that requires monitoring and medication for many years, standard PMI is much less likely to cover all of that ongoing care.

The exact position will always depend on the insurer, policy wording and your individual medical history.

What is usually included?

Here is a simplified way to look at the main areas of private medical insurance.

Let's look at the important areas individually.

1. Inpatient and day-patient treatment

This is usually the foundation of a private medical insurance policy.

Inpatient treatment means you are admitted to hospital and stay overnight.

Day-patient treatment means you are formally admitted for treatment or a procedure but don't need to remain in hospital overnight.

Subject to your policy terms, this can include things such as:

• Hospital charges
• Eligible surgical procedures
• Specialist fees
• Nursing care
• Anaesthetist fees
• Tests connected with your hospital treatment

Basic PMI policies will often concentrate heavily on this type of treatment.

2. Outpatient consultations

This is an area worth paying particular attention to.

You don't have to stay in hospital to be an outpatient.

For example, your GP might refer you to a consultant because you've had persistent pain or unusual symptoms.

You attend the hospital or clinic, see the specialist and then go home.

That is outpatient treatment.

The important point is that outpatient treatment isn't necessarily included to the same extent under every PMI policy. Some policies provide comprehensive cover while others impose monetary limits or exclude certain outpatient benefits altogether.

That can make a significant difference to how useful the policy feels in practice.

3. Diagnostic tests and scans

Sometimes the most important part of healthcare isn't treatment.

It's finding out what is wrong.

Depending on your cover, PMI can provide access to diagnostic investigations such as blood tests, X-rays and scans following an appropriate referral.

This is why the outpatient section of a policy deserves careful attention.

A policy may provide excellent hospital treatment once you have a confirmed condition but offer more restricted cover for the consultations and investigations needed to reach that diagnosis.

The headline premium won't necessarily tell you that, the policy wording will.

4. Physiotherapy and therapies

Physiotherapy is another benefit that can vary considerably.

Some policies provide access to physiotherapy and other therapies as part of their core cover. Others offer a defined number of sessions or require you to purchase enhanced cover.

For someone who regularly exercises, plays sport or has a physically demanding occupation, this may be an area worth looking at closely when comparing policies.

Again, don't simply assume it is included.

5. Cancer cover

Cancer cover is understandably one of the areas people are most interested in when considering medical insurance.

The level of cancer cover can vary between providers and policies, particularly in relation to drugs, treatment options, hospitals and ongoing care.

Private medical insurance may provide access to eligible private cancer diagnostics and treatment, but you should look specifically at the cancer section of the policy rather than assuming every insurer provides identical benefits. Treatment and drug limits may vary depending on the provider and policy.

This is one area where the detail matters more than the headline.

If cancer cover is particularly important to you, it deserves its own discussion when comparing policies.

6. Mental health cover

Mental health benefits are increasingly part of health insurance offerings, but they should not be assumed to be included comprehensively.

The level of benefit can therefore matter just as much as whether the words “mental health cover” appear on the policy.

Look at what treatment is covered, any limits that apply and how care is accessed.

7. Virtual GP and digital healthcare

One of the more practical additions to modern health insurance is access to digital healthcare services.

Many policies now provide services such as virtual GP appointments or health support through an app or telephone service.

These services can be useful even when you never make a large insurance claim.

But, again, they vary between insurers.

They should be viewed as part of the overall proposition rather than the sole reason for choosing a policy.

What about pre-existing medical conditions?

This is probably one of the most misunderstood areas of PMI.

Taking out private medical insurance doesn't usually mean that every condition you have previously experienced suddenly becomes privately insured.

Individual PMI policies commonly exclude or restrict treatment relating to medical conditions that existed before the policy started. Exactly how this works depends on the underwriting method and policy terms.

Your medical history therefore matters.

It is also important to provide complete and accurate information when an insurer asks for it, as inaccurate or incomplete information can affect whether a claim is paid.

If you've had previous medical issues, don't assume you can't obtain PMI.

But you do need to understand what will and won't be covered before proceeding.

What normally isn't covered?

Again, every policy is different, but standard PMI will not usually cover everything.

Common areas that may be excluded or restricted include:

• Pre-existing medical conditions
• Ongoing management of chronic illnesses
• Routine pregnancy and childbirth
• Cosmetic treatment undertaken solely to improve appearance
• Organ transplantation
• Certain treatments relating to drug or alcohol misuse
• Some high-risk activities or injuries
• Routine GP treatment

What does “hospital list” mean?

Another area people sometimes overlook is where you can actually receive treatment.

Some policies provide access to a broad range of private hospitals.

Others use a more restricted hospital network to reduce the premium.

This can be especially relevant if you live in or around London where the choice of hospital network can have a significant impact on premium and access.

Before selecting a policy, check whether the hospitals you would realistically want to use are included.

What is an excess?

An excess is an amount you agree to contribute towards eligible treatment before or alongside the insurer's contribution, depending on how the policy operates.

Increasing the excess can potentially reduce the premium, but it also means accepting more of the cost yourself when you claim.

For example, somebody comfortable paying the first few hundred pounds towards treatment may choose a higher excess in exchange for a lower premium.

Someone else may prefer to pay more each month and have a lower excess.

Neither is automatically better.

It comes down to your budget and how much financial risk you're comfortable retaining.

The cheapest policy isn't necessarily the best value

This is probably the biggest point to take away.

Imagine comparing two policies.

One costs £75 a month.

The other costs £105.

On price alone, the first looks better.

But what if the cheaper option has:

• Restricted outpatient cover
• A smaller hospital network
• Lower therapy limits
• A larger excess

while the more expensive option includes benefits that are genuinely important to you?

The cheaper policy may still be the right one.

But you can't know that from the premium alone.

Five questions to ask before choosing PMI

Before taking a policy, ask:

1. What outpatient cover do I have?

Check consultations, scans and diagnostic tests.

2. Which hospitals can I use?

Make sure the hospital network works for where you live and where you would realistically want treatment.

3. How comprehensive is the cancer cover?

Look at the actual policy wording rather than simply whether cancer is described as covered.

4. What isn't covered because of my medical history?

Understand any personal exclusions before you proceed.

5. What excess and financial limits apply?

Know what you may still have to contribute if you make a claim.

Those questions will normally tell you far more about the quality and suitability of a policy than simply asking:

“What's the cheapest monthly premium?”

The bottom line

Private Medical Insurance isn't a single standard product.

Two people can both say they have private health insurance while having very different levels of protection.

One may have relatively basic cover designed primarily for hospital treatment.

The other may have extensive outpatient benefits, diagnostics, therapies, mental health support and a much broader hospital network.

Neither is necessarily wrong.

The important thing is making sure you understand what you're buying and why you're buying it.

At London FS, we can help you compare private medical insurance based on the benefits that actually matter to you and your family rather than simply comparing headline premiums.

That means looking at your priorities, existing cover, medical history and budget and then explaining the differences between the available options in plain English.

Because with medical insurance, the real test of a policy isn't what it costs when you're healthy.

It's what it provides when you need to use it.

Private Medical Insurance is subject to underwriting and individual policy terms, conditions, exclusions, benefit limits and excesses. Pre-existing and chronic conditions may not be covered. The information above is general and does not replace the terms and conditions of an individual insurance policy.