It's never too late for PMI
As we get older, we are more likely to need medical treatment, so it's little surprise that medical insurance is particularly popular among the over-50s. However, cover comes at a price. As older policyholders are more likely to make a claim than their younger, healthier counterparts, insurers have to protect themselves agaisnt this increased risk by raising premiums.
Luckily, there are more ways than ever before to help older policyholders get good value cover. Many people in this age group have already experienced the benefits of private medical insurance (PMI) through a company scheme and when they come to retire are reluctant to rely on the NHS for care.
However, just because you're retiring does not mean you have to say goodbye to your cover. Most insurers now offer a continuation option allowing policyholders to keep their policy in place even though they have left a group scheme.
The key benefit of continuing your cover with the same insurer is that you may still be able to get cover for treatment of an existing condition; if you move to a different insurer, it's likely that treatment for pre-existing conditions will be excluded from your policy.
If you do have a medical condition that's likely to need more treatment, you should ask your HR department about continuation options for your policy, or else contact the insurer direct who will be able to talk you through the options.
Shop around for the best deal
However, if you're generally in good health, it may be better to shop around to find the best cover for the best price. An independent broker who specialises in PMI will be able to search the market for you to find you the best deal.
Whether you're looking for PMI for the first time or moving from a company policy, one of the best ways to push down your premiums is to opt for a plan with a high excess. "High excess options are popular because most people in this age group who are looking at PMI are reasonably well-established and can lay their hands on £500 or more without too much difficulty," says Jan Lawson, managing director of PMI advisers Private Health Partnership.
If you do have adequate savings you could even opt for an excess of a few thousand pounds - the more you agree to, the bigger the discount on your premiums. However, this does mean that you will have to fork out for more minor treatment, such as outpatient benefits.
"For older policyholders it's sensible to use PMI as genuine insurance to pay the big bills that come out of the blue and not as a way of budgeting for everyday healthcare needs, such as physiotherapy," adds Jan Lawson.
Look at the bigger picture
Opting for a high excess may seem expensive, but not when you consider how much the entire cost of private treatment would set you back. "People often think that having a few thousand pounds saved up is enough to cover any private healthcare bills. Savings of £10,000 may cover a hip replacement, but few people realise that cancer treatment can cost as much as £100,000. This would make a big dent in anyone's savings," says Lawson.
Most insurers now offer excess options up to around £500 and a handful offer higher excesses up to £5,000. Some apply this excess per claim and others per policy year, so it's important to clarify what you'll be liable to pay.
Benefit for over-50s
A big benefit of getting cover with Exeter Friendly Society is that it has an age-at-entry pricing method, which has proved popular with older policyholders. Chris Barkell, Exeter's director of sales, says: "Although this feature applies to all of our PMI plans, it most benefits the over-50s by basing their premiums on their joining ages and protecting them from scalating age-related costs."
In addition to Shared Care, Exeter has two other plans with age-at-entry pricing. Exeter Care Low Cost provides unlimited hospital cover, with some out-patient cover and oncology and optional excesses to reduce premiums. Exeter Care Preferred also has unlimited hospital cover, with increased cover for consultations, diagnostic tests, oncology, complementary and alternative therapies, transport, NHS cash benefits and optional excesses.
If you don't have the savings to fund a high excess or co-payment plan you can still bring down premiums by excluding certain treatments, limiting your choice of hospital or opting for a 'six-week option' where you agree to treatment on the NHS if you can get it within six weeks. All of these features are offered on various plans across the market and are not specifically targeted at older policyholders. But this doesn't mean they won't be the best option for some people.
There are other plans that have been designed with older policyholders in mind. AXA PPP Healthcare's Retirement Essentials plan is marketed as a low-cost policy for people aged 55-plus. It covers treatment for key conditions that commonly affect older people, such as heart conditions, eye conditions, joint replacements and hernia repair.
Ben Faulkner, spokesperson for AXA PPP Healthcare, says the plan is around half the cost of traditional cover. "This appeals to people who may not be able to afford more traditional cover and those retiring from corporate schemes or thinking of leaving the market altogether."
Other insurers prefer to take an individual approach. "We don't target specific age groups and the cover we offer over-50s will depend on their general health, attitude to health, what cover they see as valuable and what they're prepared to pay," says Fiona Harris, head of personal markets at BUPA. "A 50-year-old could be already retired and suffering health problems or still be working and living a very active life. We make pricing personalised to reflect this."
Plans may be more expensive the older you get, but whatever your situation or budget, with the right advice, there should be a plan out there to meet your needs.
Private medical insurance
PMI allows you to skip the NHS waiting list and arrange treatment at a time you choose. With most PMI policies, you pay a monthly premium (the older you are, generally the higher premium) and the policy will then pay out, up to specified cover limits and after an agreed excess, for any treatment you might need. Not all conditions are covered by PMI and you get what you pay for: the more cover you want, the higher your premium will be.
This is more usually a feature of car insurance but it can also crop up in contents, mobile phone and pet insurance policies. An excess is the amount of money you have to pay before the insurance company starts paying out. The excess makes up the first part of a claim, so if your excess is £100 and your claim is for £500, you would pay the first £100 and the insurer the remaining £400. Many online insures let you set your own excess, but the lower the excess, the more expensive the premium will be.