PMI and the benefits of youth
If you are young and healthy it can be hard to see the benefits of taking out PMI - especially if money's tight. You may still be paying off a student loan and have other big outgoings such as rent and credit card bills. You may also be struggling to save up a deposit for your first property and have little money left over for health cover.
After years of marketing to people in their twenties, many PMI providers have given up and now focus their energies on targeting older customers. "Young people have other priorities, so we don't actively market to this group anymore," says Julian Ross, a spokesperson for Standard Life Healthcare.
Youngsters shouldn't rule out cover
But that's not to say that younger people should rule cover out as there are some good deals out there and plenty of benefits to be had. Getting cover when you're young and healthy - before you have any glitches on your medical record - means that you'll benefit from the best rates insurers have to offer as you'll be seen as a very good risk.
Stephen Walker, director of specialist PMI broker Medical Insurance Services, says that health cover can prove valuable for some in this age group. "Young people are more likely to suffer from conditions such as sports injuries and so are more likely to require, for example, cover for physiotherapy."
Walker recommends BCWA's modular plan, Personal Health, with standalone cover for outpatient consultations and diagnostics and/or therapies. With a 35% low-claims starter discount, this would cost a 25-year-old non-smoker just £6.78 a month for consultations and diagnostic cover and £2.57 for therapies.
Other options include no-claims discount schemes and most insurers offer 'budget' policies that provide basic cover should you need hospital treatment. Taking out an excess will also push premiums down, but you will need some savings handy to cover it.
There is one insurer that is actively marketing PMI to younger people - PruHealth. Its Vitality plan aims tokeep costs down without opting for excesses or exclusions. Instead it asks that policyholdersw take steps to improve their health. If they take positive action, such as going to the gym regularly or stopping smoking, they earn 'vitality points', which can be cashed in for savings on premiums.
For a single, 28-year-old, non-smoking female, who selects London hospitals, chooses a £100 excess, participates in regular exercise and has low cholesterol and blood pressure, PruHealth's plan would cost £46 a month for a comprehensive plan or £30 for basic cover.
Working out can work out well
Big discounts are also provided on gym membership. After a one-off £25 joining fee plus a subsidised fee for the first three months, fees are then calculated on the frequency of your gym visits. If you visit twice a week or more, this could mean free membership to Cannons or LA Fitness.
Health cover may not be a priority for all twenty-somethings, but if it does appeal, you're in a strong position to get some of the best deals going.
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.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.