Should I buy Private Medical Insurance now, or is it a waste of money?

private medical insurance

Should I buy Private Medical Insurance now, or is it a waste of money?

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3 minute read

Private medical insurance (PMI) is a key factor in a long-term planning strategy. Your health is as vital, if not more vital than your financial income.

According to the OFT and the British Medical Journal, approximately 12% to 15% of adults in the UK have some form of PMI. That is over 4 million people.

This article compares the pros and cons of both NHS healthcare cover and private insurance.

The NHS is free to use. Because of this, some people perceive private insurance to be a needless expense. The converse perspective, however, is that taking out PMI frees up the NHS for other patients. Whatever your viewpoint, it is important to consider your options and understand alternative provisions.

The NHS is under pressure

It is well publicised that the NHS is under growing pressure and financial constraints. This has only been amplified by the current COVID-19 pandemic. The head of the NHS has recently acknowledged that waiting times for tests and treatment not related to COVID-19 are likely to increase in the second half of 2020 because of the fallout from the pandemic.

This pressure is likely to increase due to non-urgent treatments being largely suspended until the current crisis has passed.

Four-fifths of patients on NHS waiting lists are waiting for tests or outpatient appointments, rather than an operation. In response to this, Simon Stevens, CEO has stated, “We’ve got to expand diagnostic capacity, and we’ve got to do it in new ways”.

Due to these constraints, is PMI something you should consider, and if so, what options are available to you?

PMI versus self-funding

Whilst some patients self-pay for their entire treatment, it is more common for patients to choose to self-pay for select things, such as a second opinion on their illness, or for investigations to be done quicker. This is a matter of personal choice and convenience.

Like other forms of insurance, PMI premiums are adjusted based on risk. A single person in their mid-30s may pay around £50 a month. Someone in their 70s may pay £200 a month. The regular cost of PMI is non-refundable. If you don't claim, your premiums are lost.

To be able to self-fund should a problem arise, rather than taking out insurance, you would need to put money aside on a regular basis. Over time, this money builds up and may be enough to pay for a key medical event. If the money isn't needed, it is free for you to use elsewhere.

How much do operations cost? You could expect a hernia repair operation to cost between £1,990 and £3,730. A hip replacement could be in the region of £10,000.

Due to the unpredictable nature of health, it is hard to know how much to save to self-fund. By putting in place a low cost, core PMI policy, you could offset the exposure and at the same time, release any savings set aside.

Some companies offer a corporate PMI benefit; check with your employer. The cost could be lower than a similar policy taken out personally.

PMI versus NHS

Whilst the NHS is a beloved national institution, it is coming under increasing strain. This leads to growing surgical waiting times and possible restrictions of certain types of treatments.

Private medical insurance gives you more choice over your healthcare, with benefits including:

  • Avoiding NHS waiting lists
  • Your choice of a leading specialist
  • Arranging an appointment time of your choice
  • Recovery in a private en-suite room
  • Being able to benefit from ground-breaking new drugs and treatment

A basic PMI policy can cover in-patient and day-patient costs and cancer treatment in full, enabling you to circumvent surgical waiting times and giving you access to some treatments not available through the NHS.

How much does a PMI policy cost?

If you are an uninsured 60-year old person living in central London, you can expect to pay around £801 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/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 you compare this with the cost of self-funded care. Below are two common conditions. Both of them can be treated within a matter of weeks within the Core Cover premium of £801 per month:


London NHS wait time (average)

London private treatment cost (average)

Full knee replacement

21.3 weeks2


Cataract operation

18.6 weeks2

£2,2511 per eye


1All figures based on data pre-January 2020   2Laing Buisson International Limited and NHS direct

What if I already have PMI – what are my options?

If you move between healthcare providers, they will not usually cover pre-existing medical conditions. As a consequence of this, many people feel trapped and continue to pay increasing premiums.

In some cases, subject to answering transfer criteria favourably, some people find they are able to transfer for a lower premium without incurring medical exclusions. It pays to shop around.

Do you need Private Medical Insurance?

In a major health emergency, you will always have access to the full resource capabilities of the NHS. This provides a high level of reassurance that large, unpredictable events are taken care of.

For those with the niggly knee or the aching hip, mobility can be an inconvenience. As people age, our bodies wear, and things can go wrong.

Good health and mobility can be seen as the ultimate investment.

Ultimately, it comes down to personal choice, affordability, and convenience. If PMI or self-funding can fit into your annual budget, it is certainly worth considering.

If you would like to discuss the costs and benefits of PMI further with one of our expert advisors, please contact hello@capital.co.uk.

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