Protection Insurance can be taken out on your mortgage and is designed to help you or your family during unexpected events (such as illness, accidents, unemployments and death). These difficult times could potentially be costly, but protection insurance will help to cushion this.
There are a range of different protection insurances available, each serving a different purpose. They can provide private medical cover, life insurance, income protection and critical illness cover.
This series of blogs will explain the different types of protection insurance available, and how they would benefit you best.
Private Medical Cover
Often referred to as PMI, or just ‘health insurance’, this cover pays for private treatment if you happen to fall ill.
Standard PMI policies cover essential treatments (such as surgery, consultations, nursing and hospital care). They won’t, however, cover cosmetic surgery, ‘regular’ pregnancy, drug addiction or incurable conditions. More comprehensive PMI policies will provide additional benefits, which can include drugs and treatments not currently available with the NHS.
There are two types of PMI that you can take out; fully underwritten and moratorium. Fully underwritten policies need you to provide your full medial history so what will and won’t be covered can be established. Moratorium policies will impose exclusions on pre-existing conditions gong back a set number of years. These are normally the cheaper of the two, but any disorder that surfaces won’t be covered if proven that it arose during the moratorium period.
The necessity of PMI can be argued, with the NHS providing free healthcare in the UK. Those who adopt private medical care cite reasons such as fear of superbugs, hospital cleanliness and to avoid the long waiting lists. PMI will allow you to receive quick consultations and medical treatment for short-term, curable problems.
PMI is definitely not essential, and should be considered lower than income protection, life insurance and critical illness cover in terms of importance. If you do have the disposable income, then PMI can offer you peace of mind.
Premiums vary on the costing of PMI, and it varies depending on a number of variables. The level of cover taken, your age, state of health, whether you are a smoker and your medical history can affect the cost. The premiums will also raise annually to keep pace with current medical costs, and the risk of illness increase with age.
Policies will usually include a no-claims bonus which will reward you I’m various ways to remaining in good health.
In our next blog, we will look at life insurance and critical illness insurance policies.