Private medical insurance (PMI) can feel complicated: tiers, excesses, hospital lists and underwriting choices all affect what you pay and what you can claim for. This guide walks through the key decisions and the questions worth asking before you buy, so you can compare policies on what actually matters rather than headline price alone.
What PMI is designed for
PMI is built around acute conditions: illnesses or injuries that come on and are expected to respond to treatment and lead to a full recovery, such as a hernia, a cataract or a joint that needs replacing. Its two core benefits are speed and choice: faster access to diagnosis and treatment, and the ability to choose your consultant, hospital and appointment times. It works alongside the NHS rather than replacing it, so the NHS remains your route for emergencies and long-term conditions.
What's typically covered
Most policies cover inpatient and day-patient treatment (where you're admitted), consultant appointments and diagnostic tests. Higher-tier policies often extend to outpatient cover, mental health support, physiotherapy and other therapies, and more comprehensive cancer treatment. The breadth of cover is one of the biggest drivers of price, so it pays to match it to what you actually want.
What's usually excluded
Cover varies between insurers, but standard policies typically exclude long-term chronic conditions (which can be managed but not cured, and remain with the NHS), pre-existing conditions (depending on underwriting: see below), accident and emergency care, routine GP services, normal pregnancy and childbirth, and cosmetic treatment. Knowing the exclusions is just as important as knowing the benefits.
Moratorium vs full medical underwriting
How your medical history is assessed: "underwriting": shapes exactly what you can claim for. There are two main routes:
- Moratorium is the quickest to set up. You don't complete a medical questionnaire; instead, conditions you've had symptoms, treatment or advice for in (usually) the previous five years are excluded at the start. Under the "two-year rule", an acute pre-existing condition can become eligible later if you go two continuous years without symptoms, treatment or advice for it. Chronic conditions stay excluded.
- Full medical underwriting (FMU) means you declare your history up front and receive written confirmation of exactly what is and isn't covered. It takes a little longer to arrange but removes uncertainty at claim time, and the exclusions are usually fixed.
A common myth is that moratorium simply "covers everything after two years": it doesn't. The two-year rule only applies to acute pre-existing conditions that stay completely clear; chronic conditions remain excluded regardless.
Switching insurers without losing cover
If you already have cover and want to switch, you don't necessarily have to start from scratch. Continued personal medical exclusions (on full medical underwriting) or continued moratorium terms can carry your existing position across to a new insurer, so conditions that arose while you were insured aren't suddenly re-excluded. This is one area where getting the switch right really matters: moving the wrong way can reset your position.
Outpatient cover tiers
Outpatient cover: consultations, scans and tests where you're not admitted: is often where policies differ most. Plans range from no outpatient cover, through a capped annual limit, to full outpatient cover. Since a lot of early diagnosis happens at the outpatient stage, this tier is worth scrutinising rather than skimming.
Hospital lists
Most insurers offer tiered hospital lists: the more comprehensive the list, the higher the premium. Central London and other premium hospitals usually sit on the more expensive tiers. If the hospitals you'd realistically use are on a mid-tier list, you may be able to reduce your premium without losing access to the care you'd actually want.
Excess and how it affects your premium
The excess is the amount you agree to pay towards a claim. Choosing a higher excess usually reduces your annual premium significantly, and can be a cost-effective way to self-insure minor claims while keeping cover for the big ones. Check whether the excess applies per policy year or per condition, as this changes how much you might pay if you claim for more than one thing.
What drives the price
Premiums are individually priced. The main factors are your age, where you live (cover tends to cost more in London and the South East), the level of cover you choose, your hospital list and your excess. Premiums also include Insurance Premium Tax, currently 12%. Two people of the same age can pay very different amounts depending on these choices, which is why comparing like-for-like matters.
Cancer cover and other variables
Cancer cover varies considerably between insurers (particularly around advanced or ongoing treatment and certain drugs) so if this is a priority, read the wording closely. Mental health, dental and optical are often optional extras rather than core cover. None of these should be assumed; check each against the policy documents.
Digital GP and added extras
Many policies now bundle in extras such as remote GP appointments, second-opinion services, health apps and wellbeing support. These can be genuinely useful and add day-to-day value beyond treatment cover, but they shouldn't be the main reason to choose a policy: the core cover and exclusions matter more.
Individual or company-paid?
PMI can be arranged personally or provided by an employer as a group benefit. Group schemes often secure more favourable underwriting and a lower per-person cost, and some cover pre-existing conditions that an individual policy would exclude. If you have access to cover through work, it's worth understanding how it compares before buying your own.
Renewals and rising premiums
PMI premiums tend to rise each year, reflecting both your age and medical cost inflation, and can jump after a claim. At renewal it's worth reviewing your excess, hospital list and cover level rather than auto-renewing: though be careful, as switching insurer can affect how pre-existing conditions are treated. An adviser can help you weigh a saving against any loss of continuity.
Channel Islands considerations
For clients in Guernsey and Jersey, private healthcare is the norm without an NHS safety net, so cover plays a different and often more central role. Policy wording, insurer availability and the hospital network all differ from the UK mainland, which makes specialist, locally aware advice particularly valuable.
Questions to ask before you buy
- Does the policy include outpatient consultations and diagnostics, or only inpatient and day-patient treatment?
- How will your medical history be underwritten, and what will be excluded?
- Which hospitals and consultants can you use, and at what tier?
- What is the excess, is it per year or per condition, and how does it change the premium?
- How comprehensive is the cancer cover, and are mental health, dental or optical included or optional?
The bottom line
PMI rewards careful comparison. The cheapest policy is rarely the most comprehensive, and the most comprehensive is rarely the cheapest: the goal is the right balance of cover, hospital access and excess for your needs and budget. Because wording and exclusions vary significantly between insurers, comparing policies carefully, or speaking to an adviser, is the surest way to end up with cover that does what you expect.
