PMI: It's a family affair

Juggling family life with work and other responsibilities is challenging enough at the best of times, but when you or one of your brood is ill, it just adds to the pressure.

If your husband, wife or child needs hospital treatment it affects the whole family and can be a worrying time. Uncertainty over waiting lists on the NHS can add to this worry and mean you have to take time off work or arrange childcare at short notice when confirmation of the appointment or operation finally comes through.

Taking out a PMI plan for your family is one way to put you back in control, so you can get access to good quality care at a time that suits you and a place that's convenient. But while the benefits of PMI are certainly appealing to families, many are put off buying cover because they believe it's too expensive.

It's true that a comprehensive plan does not come cheap. However, with families a key target market for health insurers, there are a number of plans designed to provide good value cover, with children often added to policies at a discount or even for free.

No need to compromise when cutting costs

And keeping the cost down does not have to mean opting for skeleton benefits. Jan Lawson, managing director of PMI broker Private Health Partnership, says she tends to recommend that families look at excess options instead of restricting benefits, as this often provides a better value plan in the long run: "If you start reducing benefits it can be very confusing about what you are or are not covered for. Once there are lots of 'ifs, buts and maybes' you lose the certainty that cover should provide and this can lead to disappointment when you come to claim.

"An excess of £100 or even £250 is often affordable and can make premiums much cheaper. It may mean paying for a first consultation or a few visits to the physio, but once you've paid your excess, you have peace of mind that you have full cover after that."

If you take BUPA's Heartbeat Health Care Select 2 Plan, which provides a high level of cover, the monthly premium for a family of four (dad, 38, self-employed; mum, 38, teacher; and four-year-old twins - all non-smokers with clean medical histories, living in Exeter) would be £130.50 with no excess, or £117.10 with an annual excess of £100 a person. Over a year this would mean premiums savings of more than £160.

If your family is in good health, you may be happy opting for a larger excess. WPA's 1XS policy is aimed at families - it''s a comprehensive plan with one single excess of £1,500 a year for all the family. For a family of four (two adults aged 38 and two children under 20) it offers a monthly premium of under £60.

Limiting your options can keep costs low

Lawson says Norwich Union's PMI offerings can provide good value for families. Its Health Solutions plan allows you to choose elements of cover so you can build an affordable package. It also allows you to reduce premiums if you choose to use only private facilities linked to NHS Trust hospitals, which Lawson says can lead to a 15% discount.

Limiting the hospitals you get treated in can be a good way to keep premiums low and most insurers offer a 'restricted hospital' option. But if this means extra travelling time and expense, it could be a false economy. "If there's more than one private hospital locally and you don't mind which one you're treated in, then it makes sense to opt for just one choice as it can reduce cost without reducing the quality of care you receive. But if it means having to travel further you need to consider whether it's worth it," says Lawson.

NU's other option for families is its Fair + Square plan. The idea behind this product is that it gives you the choice between going private or receiving a money-back payment if you opt for eligible treatment on the NHS. But if you prefer to go private you still can. This means that if you get your NHS appointment through quickly and are happy to stick with it, you receive £500 for the first night and £250 for each subsequent night you stay in hospital, up to a maximum of £10,000 a year. If you can be treated as a day patient, you receive £250. Children under 18 get money-back payments at half the adult entitlements.

Fair + Square family plans cover you, your spouse and children under 24. You pay for yourself, your partner and your eldest child, and then all younger children are covered for free. You can dip in and out of the NHS and private sector with most plans, but a plan that has a high NHS cash benefit, such as Fair+Square, could be useful if you're happy for some treatments to be carried out in an NHS hospital.

'Guided option'

In a similar way to restricted hospital options, Standard Life Healthcare offers a 'guided option' that reduces premiums on its PMI plans by 15%. It means you are treated only in hospitals belonging to the BUPA, Capio or BMI networks and they also make all the arrangements for your care - including selecting the consultant who treats you. By letting the hospital manage its own resources, they save you money, so you get access to cheaper premiums.

Another way to push premiums down is through a 'six-week option'. If you take this option, you agree to get treated on the NHS if you can get treatment within six weeks - if it takes longer, you go private. This has become a common feature on many PMI plans and can halve premiums on some plans.

If you'd prefer to reduce cost by limiting benefits, BCWA Healthcare's Personal Health plan provides a good budget option and, according to Stephen Walker, director of Medical Insurance Services, is a popular choice for families. This menu-based plan provides five cover options: out-patient tests and consultations; acute surgery, complementary therapies, cancer/heart
treatment; and dental/optical treatment. Unlike other menu plans, there are no compulsory 'core' benefits, so you can choose exactly what benefits you want, enabling you to 'personalise' cover separately for each family member.

"For example, you can choose in-patient or out-patient cover for the children and in-patient plus cancer cover or in-patient plus out-patient consultations and diagnostics for the parents," says Walker.

He adds that families should decide what cover is required according to their age and where they live. "Younger families may decide that they are less likely to require cancer cover, or depending on the NHS facilities in your area, you may decide that you can rely on the NHS for cancer treatment. However, if the local NHS has a poor record regarding cancer treatment, this may then be a priority. If teenage children are to be covered, it may be decided that out-patient cover including physio is a
priority for them."

Cancer treatment a priority

With worrying stories in the press about NHS cut-backs for cancer treatment and life-saving drugs, access to cancer treatment is becoming a priority for more people. If you want to ensure your plan covers the latest cancer treatments, then it pays to seek advice from a local independent broker.

Cancer cover varies substantially across the market and it can take a lot of research to find the best options. A local broker will not only be familiar with the different cover options available, but will also be able to inform you of the quality of NHS treatment available in your area. Common exclusions on standard plans include imposing time limits on how long you can receive expensive treatments. For example, on its standard individual PMI plans, AXA PPP healthcare limits longer-term cancer chemotherapy treatments for up to one year, or three years on its higher level of cover.

However, like a growing number of insurers, AXA now provides a scaled-down plan designed to cover these serious conditions without sky-high premiums. Its Essential Health Cover covers just three conditions - cancer, heart conditions or stroke - providing a two-year benefit limit of £250,000 for two years from diagnosis, after which the policy terminates.

Similar products exist across the market, including BUPA's HealthCare Select Heart & Cancer plan, which covers in-patient, day-patient and out-patient treatment for acute heart and cancer conditions only. There's a myriad options out there to keep cover affordable. So, before dismissing PMI as an expensive luxury, it makes sense to talk to an adviser about which plans could set your mind at rest over your family's health.

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