This post is dedicated to explaining PMI and PROTECTION jargon.
Last updated: May 2021
Private Health/Medical and Protection insurance is complex. This glossary aims to explain the meaning behind common words used in the private medical insurance industry. We hope that it helps you to be more informed when choosing your Private Medical Insurance policy.
- NOTE: These are generic and sometimes do differ from one PMI provider to another.
- NEED HELP? Please contact us if you have any questions regarding a term or phrase that you have seen or heard that we have, or have not listed here.
- We only recommend insurers who offer 5-star Defaqto-rated policies, and we’re familiar with a wide range of policies.
6-week option
You’ll often see 6-week options being offered in private medical insurance policies. Sometimes it’s a 4-week option. With this option in place, you have to use the NHS first if you can have in-patient or day-patient care for that treatment within 4- or 6-weeks. If the NHS can’t treat you within that time, and you have an eligible claim then you can make a claim on your policy in the usual way instead. Taking out a 6-week or 4-week option will usually bring your premiums down.
Acute flare-up
This is a sudden or unexpected deterioration of a chronic condition; one that’s likely to respond to prompt treatment and bring you back to the state of health you were in before the flare-up.
Acute conditions
An acute condition is one that happens without warning and is curable. An acute condition responds quickly to treatment which will return you to the state of health you were in before, or lead to a full recovery. By contrast, a chronic condition is one that’s developed over a long period of time – such as asthma and usually cannot be cured.
Beneficiary
If you have life insurance and die unexpectedly, a tax-free lump sum will be paid out to the person of your choice. This person is called a “beneficiary”. In most cases, people pick their partner/spouse or children.
Chronic conditions
A chronic condition is one that’s developed over a long period, such as asthma. Insurers’ definitions vary, but most agree that a chronic condition has one or more of these characteristics:
- It needs ongoing or long-term monitoring with examinations, check-ups, and/or tests
- It needs ongoing or long-term control or relief of symptoms
- It requires your rehabilitation or for you to be specially trained to cope with it
- It continues indefinitely
- It has no known cure
- It comes back or is likely to come back
One example of a chronic condition is diabetes. Private medical insurance is unlikely to cover regular check-ups for diabetes, but if you had an acute flare-up and needed treatment, then some policies might cover the costs of those appointments. The aim would be to get you on the road back to the state of health you were in before the flare-up.
Continued Moratorium Underwriting
This is a type of underwriting – it’s similar to Continued Personal Medical Exclusions (see below). If an insurer offers you Continued Moratorium Underwriting, then they’re offering to switch you from your existing policy to a new one whilst back-dating the new Moratorium clause to the start date of your current policy.
The advantage is that the Moratorium clause runs from the date it was agreed with the previous insurer. The disadvantage is that each insurer may have slightly different versions of the Moratorium, and the claim will always be assessed under the most recent terms and conditions.
Continued Personal Medical Exclusions (CPME)
This is another type of underwriting. It lets you switch from one insurer to another by transferring all the exclusions you have in place already. Existing medical conditions are then covered by the new insurer unless they put a personal exclusion into the terms. Private medical insurance companies will only allow you to switch if you meet certain eligibility criteria, such as whether or not you’re due to have medical treatment. If an insurer can’t offer Continued Personal Medical Exclusions, then the only alternatives are Full Medical Underwriting or a Moratorium.
Co-Payment
This is a defined fixed percentage or fixed sum payable by you, usually at the time a service is received to offset some of the cost of care. It must be paid before any policy benefit is payable by an insurance company.
Critical illness cover
Provides cover if you get a specific type of life-changing condition.
Day-patient
If you’re a day patient, then you need a bed in the hospital for one day, but you’re not expected to have an overnight stay as well.
Death in service benefit
If you are employed, your work contract might include a “death in service benefit”. This means your employer will pay out a multiple of your salary to your beneficiary if you die unexpectedly
Eligible condition
If something’s an eligible condition, then it’s a condition that’s covered by your policy.
Excess
The higher the excess, the lower we can set your premium. As with home and car insurance, you can choose to pay a fixed sum - an excess – towards your treatment. Providers will offer varying levels of excess but can be anywhere from zero, £100, £250, £500, £1,000 or even as much as £5,000.
Once you’ve chosen an excess, you choose whether you pay:
a) Once per policy year: Even if you make two or more claims in the same policy year, you need only pay the excess once and only at the time of claiming. If your claim carries on into the next policy year, you’ll need to pay the excess again. This applies to each person included on your cover.
b) Each time you make a claim/per new condition: Make two or more claims in the same policy year and you’ll have to pay an excess for each claim you make. When you claim for treatment of a particular condition, providers will consider it a new claim after 12 months. So you’ll need to pay the excess again for any treatment after this point. This applies to each person included in your plan.
NOTE:
With some providers, the excess doesn’t apply to some benefits but each provider will make this clear in their terms and conditions and exclusions, for example, when using Virtual GP and claiming for NHS Hospital Cash Benefit, an excess might not be indicated.
An excess is sometimes not applied to claims made under the dental cover option (if included) and also the worldwide travel cover option (if included) where a different excess may apply. Providers will pay for the rest of your treatment up to any limits on your plan.
Fee schedule
Sometimes this is referred to as the insurer’s ‘fee guidelines’. Each insurer decides how much it will pay for a procedure or for a consultant’s services etc. This can vary, depending on the hospital involved, the experience of the consultant and other factors. We always advise you to contact the consultant for confirmation of their fees, their procedure code and estimated fees associated with the proposed claim before contacting your provider to make a claim.
Full cover promise
This is a promise made by the insurer, to cover any shortfalls on the agreed cover for eligible in or day-patient treatment. It’s an option that’s offered on some policies, but not all.
Full Medical Underwriting
This is a type of underwriting. Quite often, an insurer wants to understand your lifestyle your medical history in detail before working out whether exclusions will apply on a health insurance policy. In this case, you’ll need to provide detailed information about any historical, current and pending medical conditions, along with any associated treatment and medication. Sometimes an insurer will ask to look at your medical records, or they will want a Doctors report.
With Full Medical Underwriting, it’s very clear what you’re not covered for under your policy. The disadvantage is that an insurer might add medical exclusions. These may be hard to remove at a future date. The more serious the medical condition, the more likely it is to see a personal medical exclusion added.
Income protection insurance
Designed to support you financially if you can’t work due to illness or injury and your income drops. Particularly relevant for anyone self-employed who wouldn’t get sick pay.
In-patient
If you’re an in-patient, then you need an overnight stay in a hospital bed for one night or more.
Joint life insurance
Some couples choose to take out a joint life insurance policy. This can result in cheaper monthly payments but will only pay out once. So if one person dies unexpectedly, the surviving partner would no longer be covered.
Life insurance
A policy that will pay your dependents a lump sum or regular payments if you die unexpectedly.
Mortgage protection insurance
A type of term life insurance where the level of cover decreases over the term of the policy. It is mainly used to cover mortgage repayments if you die unexpectedly.
Medical History Disregarded
This is a type of underwriting. If an insurer says they’ll underwrite your policy on a ‘Medical History Disregarded’ basis, it means they’re not going to take pre-existing conditions into account.
Moratorium Underwriting
This is another type of underwriting. It’s generally seen as the most straightforward approach. It works on the basis you’ll need to prove you’re eligible to make a claim, if or when you make that claim.
Generally speaking, you’re not covered for medical conditions or related conditions you’ve had (or have been treated for, advised about or had symptoms of) in the previous five years, unless you’ve been receiving no treatment or advice, and are symptom- and medication-free for two continuous years.
The advantages of a Moratorium are that you don’t need to fill out medical forms, and a condition that you had over five years ago might be covered if it were to re-appear in the future. The main disadvantage is that you’re not sure what will be covered until you make a claim.
Networks
If you need treatment, it helps to be as close to home as possible. There’s also a great deal of reassurance in being treated by specialists in a hospital that’s been recognised for its expertise in treating specific conditions.
Each insurer prefers their customers to use a defined group - or network - of hospitals and specialists. Usually, this is because the insurer has a pricing agreement in place with that network. Some insurers might use the same facilities whilst others prefer to use their own facilities. Your policy will show you clearly which hospitals would be included with your cover, and which ones aren’t.
NHS cash benefit
This is an option that’s offered by some insurers. Instead of claiming on your policy for an eligible condition, you accept payment from the insurer and use the NHS instead.
The amount of money received by you from the insurer is directly related to the number of days or nights you’d be in the hospital. Each insurer has its own terms and conditions for NHS cash benefits and we’re happy to talk them through with you.
Out-patient
If you need to go to the hospital but don’t need a bed, then you’re what’s known as an out-patient. Out-patient cover is usually used to get an initial diagnosis. It often covers the costs of consultations and diagnostic tests, such as blood tests, MRIs and other scans. Out-patient cover is also likely to include visits after a treatment and diagnostic tests – like x-rays – in a follow-up consultation. In addition, out-patients can include physiotherapy, osteopathy, and other similar therapies which will be detailed in the terms and conditions of your policy.
Payment protection insurance (PPI)
Supports you if illness or redundancy means you can’t meet regular payments of your debts.
Pending medical conditions
If you have distinct symptoms but an associated medical condition hasn’t been diagnosed yet, then you have ‘pending medical conditions’.
Personal Medical Exclusions
These are exclusions that are written into your policy, which only apply to the person named.
Pre-existing condition
This is a disease, illness or injury that you’ve had treatment, advice, or medication for, or have seen signs/symptoms of before you took out the policy, whether or not the condition has been formally diagnosed.
Premium
Insurance policies are usually paid for in monthly payments called premiums. For example, you might pay £5 per month for your life insurance policy.
Private Medical Insurance broker
A Private Medical Insurance broker is a company who work on your behalf when looking for and handling your health insurance policy. They carry out many of the administrative tasks involved, such as gathering quotes, negotiating with insurers and helping with claims, which saves you time. A good broker will aim to get you the best private medical cover that suits your needs, and at a good price.
Private medical insurance vs. health insurance
These are two ways to describe the same kind of insurance policy. We usually call it health insurance. Different insurers can use different descriptions.
Private medical insurance – ‘PMI’ – supplements the treatment offered by the National Health Service (NHS). Benefits often include ‘no waiting’ lists and access to treatments that aren’t always available on the NHS. Other perks - amongst many - will be private rooms (subject to availability) and unrestricted visiting hours.
Qualifying period
A qualifying period is an agreed amount of time that needs to pass after you’ve bought your health insurance policy, before the cover starts.
Shared Responsibility
A feature that is unique to WPA is the concept of Shared Responsibility which has been introduced in place of excess. It is still the idea of a co-payment but works in a slightly different way. Shared Responsibility is an innovative method of co-payment allowing you to take control of the cost of your premiums. Unlike a traditional excess, WPA pays a percentage, i.e. 75% of each claim for eligible treatment no matter how small. You share the cost of your treatment by contributing, i.e. 25% towards every claim for eligible treatment. Your contribution is also ‘capped’ at an agreed level for your policy year. You may choose different levels of Shared Responsibility and we will confirm these options and levels to you before you start your policy.
Why Shared Responsibility is better than an excess: exclusive to WPA, they always pay at least i.e. 75% of each and every claim for eligible treatment. For example, if you only need a consultation you will not be left paying a full excess to cover it.
Shortfall
Insurers use fee guidelines to confirm how much they’re willing to pay for treatment. If the cost of that treatment turns out to be higher, then you’ll be asked to cover the difference – which is known as the shortfall. For example, your insurer will probably not want to pay more than a certain amount for a knee replacement. If you prefer to use a consultant whose work costs more than that, then you’d have to pay the extra amount. This will be always be discussed and agreed upon with your consultant prior to treatment.
Sum insured/assured
This is the amount of money your insurance company will payout. For example, if you die unexpectedly five years into a 20-year life insurance plan, the provider will pay a pre-agreed sum to your beneficiary. The sum assured is specific to each person and will depend on how much you think you will need to protect your family and pay off any debts. We will happily discuss the amount of pay-out you think you might need with you.
Term
The term of an insurance policy is the amount of time it lasts. Terms can range anything between a few years, to the full life of your mortgage if it's a mortgage protection policy, or until you cancel or allow it to lapse.
Term life insurance
There are two main types of term life insurance: level term and decreasing term.
Decreasing term insurance is often used to cover large debts, e.g. mortgages, where the outstanding amount decreases over time while you pay it back.
Increasing term is the opposite: the value increases over the life of the policy. Level term insurance will cover you for a set amount, over a specific period of time, such as 10 or 25 years or until a preferred age, sometimes for life.
Underwriting
Underwriting is the term that insurers use to describe assessing risks and then offering a policy based on those risks. There are several different types of underwriting, and your medical history might affect which types are available to you from each insurer.
Waiver of premium
If you are too ill to work and can’t afford your monthly premiums, a waiver of the premium option means you would still be covered. Not all insurance policies offer this, so make sure you ask.
Whole of life insurance
A type of life insurance that covers you for the rest of your life, i.e., not a set term. It is usually more expensive than fixed-term insurance as payment is guaranteed.
Workplace benefits
If you are employed, you might find you have some workplace benefits, such as private medical insurance, sick pay or type of life insurance, sometimes called ‘death in service’.