I am a broker arranging private medical insurance for a client. I am looking to contain costs using a menu-based plan and picking and choosing the options for my client. However, I am worried about the long-term implications of such a plan, in case I do not choose suitable options for my client .
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Other ways of controlling premium include excesses, stripped-down hospital lists and six-week options, where the policy only provides cover for in-patient and day-patient treatment when the NHS waiting list exceeds six weeks. Work with the client to find the optimal combination of benefits and ensure that all limitations are carefully explained.
The appropriateness of full medical underwriting versus moratorium underwriting will depend on the client’s medical circumstances. The moratorium requires a careful and precise explanation while a recommendation for full medical underwriting must be accompanied by a non-disclosure warning.
The best brokers go further than simply comparing headline benefits and premiums. Cancer cover, no-claims discounts, service levels and fee maxima should all enter into the broker’s deliberations.
Fee maxima refers to the maximum amount that the insurer will pay to the surgeon and anaesthetist, and, by extension, the likelihood that the client will encounter a shortfall.
Protection brokers and IFAs without the requisite expertise should refer on to a specialist PMI broker for a commission share rather than dabble in an unfamiliar market.
James Glover, Simplyhealth
We are going to be replacing the product we sell to individuals on a direct basis from 1 July. It will be called Simply Personal Health. We’ve tried very hard with this product to minimise exclusions and to think about it from a consumer perspective, to minimise uncertainty.
I would say the starting point is a clear understanding of the client’s needs.
Many people will be transferring from an employer’s PMI cover, which will be comprehensive.
As a broker, I would look at what clients are used to with premiums and affordability. To make it more affordable, I’d then look at the options. If it’s a client who has never had PMI before, it’s about their concerns around their health and their family’s health.
If someone had no or limited heart or cancer cover, once they were into a claim they would not have the option to extend that cover. This is why they need to understand exactly what they have got. However as an insurer, we would never leave someone in a situation where they didn’t know where their treatment was coming from such as helping them with a transition to the NHS.
We also have very clear product literature which should enable brokers to give the right advice to their client. It’s very clear around what is included and what is not included in cover. We also frequently do face-to-face briefings with brokers either on an individual basis or with groups as a Q&A session.
