Private Medical Insurance (PMI) is rather costly due to expensive new drugs and complex medical procedures causing annual increases of up to 15%.The following tips will help you decide whether you need PMI and if you do, what type and what the cheapest way to do it is, probably saving you £100s annually.


Consider if you really need PMI

Private medical insurance is a luxury, not a necessity. There are three main reasons to buy it: to jump the queue for non-urgent treatment; to choose when and who operates; and to get more comfort and convenience during treatment.  If you want and can afford added comfort and much speedier operations then private cover provides this. Otherwise, the NHS or the healthcare cash plan is better.

Remember even if you go private, the doctors and specialists aren’t private doctors. The vast majority are NHS medics. And it’s often the NHS specialists who are at the cutting edge of modern medicine. Furthermore, some private hospitals only provide a basic post-operative care, and medical cover is surprisingly limited at night.

Consider a healthcare cash plan

Healthcare cash plans are very different to PMI and include dental, optical and alternative health too.  Here you pay a few pounds a month and if you then need to pay for NHS or private treatment, you can claim some of the cash back up to an annual maximum limit.  Think of it as a good added extra to NHS care, rather than an alternative to PMI.

Check whether your employer or your partner’s offers a scheme

Some employers may pay for your PMI for you or your whole family, although this is classed as a “benefit in kind”, so you’ll pay tax on the cost. Yet, even if you need to pay yourself, it can be cheaper, because firms’ bulk-buying power enables them to negotiate substantial discounts.

So find out the cost and then compare it to the cheapest plans using the following steps. One final note, if your employer doesn’t have a scheme see if your partner’s company will allow you to join it.

Become your own insurer

If you’re fitter than a fiddle and healthier than humanity, you probably don’t need private medical insurance anyway. Nevertheless, for extra peace of mind, why not self-insure by becoming your own insurer?

If you are in good health generally, instead of paying, say, £300 a year to a PMI provider, pay £25 a month into a high interest savings account and should you need any minor treatment or consultations, you can simply use this income as your own insurance fund.


Besides doing self-insuring, you can have additional peace of mind against any serious problems by buying a PMI policy with a high excess. High excess means the amount of each claim you agree to pay.

Naturally, the higher the excess, the lower the PMI cost.  For example, rather than buying an expensive cover-all policy with an excess of £50, you could agree to pay, ex., the first £5,000 of any treatment. This makes your policy very, very cheap, just a few pounds a month but if you have serious problems, you have some cover to fall back on, limiting your exposure to major problems.
With several hundred different policies on offer, all with different benefits and exclusions, searching the entire market would mean calling hundreds of different companies.  Price-comparison website Moneysupermarket compares over 550 policies to find the cheapest policy to suit you. It gives you a useful benchmark to compare other policies against and is very quick to use.

STEP 2: Cut the cost regardless of the broker