Sarah, 28 and Ted, 31 live in Oxford and are expecting their first child in four months' time. Both are healthy, non-smokers and they would like to purchase private medical insurance (PMI) for both themselves and their child once it is born. Being a young family, their budget is quite tight, but they are prepared to pay an excess of up to £1,000 in exchange for cheaper monthly premiums. What are their PMI options?
We have selected two options, a comprehensive and a low-cost plan covering both Sarah and Ted, although they will be able to add a child at birth without further underwriting.
The comprehensive option is Norwich Union Medios Executive Plus at £69.22 per month. The policy carries an excess of just over £700 per year for the policy as a whole, rather than for each member. This excess disappears over the next three years should they not claim, although the discount on the premium still applies.
The plan is medically underwritten and offers comprehensive benefits, meeting inpatient and outpatient treatments in full, and also provides for alternative treatments such as chiropractic. The main advantage of the plan is that it is has no age-band increases during the life of the policy.
The low-cost option is Legal & General's Lifetime Essentials at £34.86 per month with a £250 per year excess. The plan has a choice of either medical history or moratorium underwriting and provides good basic cover. Inpatient and day case treatment is covered in full, with outpatient cover following inpatient or day case treatment for a period of three months following the date of discharge from hospital. With a tight budget, Sarah and Ted will have to consider the long-term effects of maintaining a PMI plan. If it is within their means, we would definitely recommend the Norwich Union Medios Executive Plus plan as, with no age-band increases, it would provide some stability in future pricing although, as with all PMI products, it would be subjected to annual medical inflation increases at renewal.
Claire Ginnelly, Standard Life Healthcare
There are two parts to Sarah and Ted's case that need considering. First, they are looking to keep premiums low, perhaps by paying an excess. And second, they are a young family who, once covered by PMI, will want to be reassured that they can continue and extend their cover as their family grows and ages.
In terms of reducing premiums by paying an excess, they could take out a Primecare plan with an excess of £250. They would get wide-ranging comprehensive cover and their premiums would be £99.40 if they paid monthly. Or if they took out a Choices plan with a £1,000 excess they would pay just £45.52 – for extensive cover and helpful information about treatment costs and options up to the excess level. Both plans have no overall limit on the combined cost of claims.
The other point that Sarah and Ted need to consider is the `family friendliness' of any PMI cover they take out. With both Primecare and Choices there's the convenience of having a 24-hour GP Advice line, which can be a tremendous advantage for busy people, especially if they have young children.
There are other family benefits – such as parental accomodation – that comes as standard with our policies. This means that if a child under 14 who is covered by the policy has to stay in hospital, a parent can stay overnight as well.
Also with our plans PMI is just as attractive when more children are born, once the first child is added to a policy any subsequent dependent children are covered at no extra cost. Choices or Primecare would be ideal for a young 'family to be'.
Howard Hughes, BCWA
The good news for Sarah and Ted is that they will not need to purchase family cover for the first year. Newborn children are added free of charge to their parents' policy for the first year of cover. Another point to bear in mind is that newborn babies added to policies are not subject to medical underwriting. This would seem to be an auspicious time for Sarah and Ted to purchase a private medical insurance policy.
BCWA has two schemes for the couple to consider: Preferential and Accessible. As they live in Oxfordshire, Scale C cover will provide appropriate cover for all hospitals in the immediate area under Preferential Cover. An excess of £375 provides a saving on rates of 40%. The excess applies once each year for each person included in the membership – not for every claim made. They would pay monthly contributions of £83.35 increasing to £102.58 for the inclusion of family cover at the next renewal. An additional discount of 5% is available if they should choose to pay annually.
Selecting Accessible Cover can make further savings; the scheme does not include psychiatric benefit and limits outpatient benefit to £300 per person. For this cover they would pay £63.50 monthly increasing to £78.16 for family cover at the next renewal. Once again a 5% discount is available if they choose to pay annually. Sarah and Ted may also like to know that both schemes also include a range of counselling helplines including access to an emergency baby-sitting service.
