Private medical insurance (PMI) is a crucial part of a long-term retirement strategy. It requires careful consideration because your health is equally as vital as your finances, if not more so.
The NHS is under increasing pressure
It is well-publicised that the NHS is under ever-growing pressure and financial constraints. The fundamental benefit of a private healthcare policy is that it offers you choices that you would not otherwise have.
PMI allows you to circumvent the NHS for non-emergency medical conditions, offering a wider variety of hospitals, practitioners and treatment options.
A general misconception is that private healthcare insurance is very expensive and that it will not cover pre-existing medical conditions. However, this is not always the case.
What are your options?
Typical retirees will normally be faced with one of two options:
- Do I proceed with a group scheme leaver’s policy?
- Should I self-fund my medical needs?
The answers to these questions are personal to your own requirements. You will need expert guidance to help you explore the pro and cons of each option, so that you can make a fully informed decision.
Leaving a company-paid PMI scheme?
As a retiree, you may have had the benefit of a company-paid healthcare insurance policy, and it is likely that you will be reluctant to lose the reassurance that such a policy provides.
Many PMI insurers can provide group scheme leaver options designed to protect your current level of cover and your pre-existing medical conditions with your current insurer. Subject to your medical history, they can provide you with options from the wider market that will still cover your pre-existing conditions.
Private medical insurance should always be considered and discussed as part of your retirement planning. Do you need it? Can you afford it? A simple policy based on core cover only should include ‘in- and day-patient’ treatment and cancer treatment costs in full (subject to underwriting).
PMI versus NHS, and how they compare
If you are a 60-year-old living in central London, you can expect to pay about £90 per month for a core cover policy with AXA PPP, offering the following benefits:
- Full in-patient and day-patient cover
- Full cancer care, including drugs, diagnostics and reconstructive surgery
- Full London hospital access with Fast Track appointment services
- £500 annual excess with new moratorium underwriting
The benefit of a PMI policy becomes evident when compared with the cost of privately self-funded care. Two common conditions are shown below, often occurring during retirement and which can both be treated within a matter of weeks with core cover:
- Full knee replacement Average London NHS treatment time of 21.3 weeks*
Average London private treatment cost of £10,468*
- Cataract operation Average London NHS treatment time of 18.6 weeks*
Average London private treatment cost of £2,225* per eye
*sources Laing Buisson International Limited & NHS direct
The C word – would you have cover?
Cancer care, treatment options and waiting times are of paramount concern for everybody, especially as you get older. The NHS aims to offer a cancer specialist referral within 2 weeks. Unfortunately, this is not guaranteed and does not account for the required diagnostic tests.
Most basic PMI policies will offer the following:
- Rapid access to a consultant
- Diagnostic tests within several days
- Access to drugs not guaranteed to be available on the NHS
So, do you need private medical insurance when you retire?
It all depends.
Affordability. Your overall health. Local access to high quality NHS hospitals. Whether you have had PMI before. Feedback from friends and family. These are all influences on your decision. One of the biggest influences is peace of mind and reassurance.
Some people feel that they can ‘self-insure’ based on their savings and investments, and subsequently pay as they go.
It is likely that you will get aches and pains at some time which affect your wellbeing. PMI is ideal if you simply can’t wait for the NHS.
Good health should be viewed as the ultimate investment. It is something that you should invest in and protect as much as possible.
Who are IHCS?
Capital Asset Management partner with Independent Health Care Solutions (IHCS) in our joint aim to support and help you make an informed decision about your retirement health planning. We have chosen IHCS as they are a specialist medical insurance broker who give unbiased advice, jargon-free guidance and ongoing support throughout the policy year.
If you want an impartial second opinion on your PMI needs, please contact us today.
Authored by Samuel Townsend, Healthcare Consultant, Independent Healthcare Solutions.